For many families, buying a home in a hot seller’s market has been extremely difficult, as the supply of available homes for sale has not even come close to meeting the demand that exists. More and more homebuyers are looking to get into the housing market with still very low interest rates, a better economy and the soaring of home prices that has taken place for several months now.
So how do some homebuyers get their offers accepted while others continue to submit offer after offer without getting them accepted? Its not a secret, it's a process and a plan of action that many agents and their clients follow that increase the likelihood of buying a home.
This age-old advice remains true today. Don’t do anything until you are pre-approved and make sure that you are pre-approved and not pre-qualified. Pre-qualified is a general assessment of what you may be able to buy. A pre-approval is a complete loan application followed by verification of income, assets and credit report and a submission of your package to an underwriter who tells you in writing that you are approved for a mortgage, subject to finding a home in the appropriate price range.
Know what homes are selling for in the areas that you are interested in and know what you can buy in your price range. This is really important and will be an eye opener when you are ready to make offers on homes. When you know that homes are selling for much higher then your maximum pre-approved price, you know its time to refocus your search in an area that matches your qualifications.
Ask your agent for a list of closed sales within the past 90 days in the areas that you are interested in, as this will tell you also what people are paying for homes in that area.
If you are pre-approved for a $500,000 home, stop looking at $600,000 homes thinking that you will buy one for $500,000 in a hot seller’s market. Maybe in a different market or area where it is a buyer’s market will you be able to accomplish this. But not in an area that continues to have multiple offers on homes.
If you see a home listed for $500,000 and it has multiple offers and your research has told you that homes are closing at $500,000 or more, coming in at $450,000 will not get you the home. You can pretty much be sure of this.
Its not a knock on your desire to negotiate the best possible deal on a home in order to buy it at a much lower price than market value, that is wise and smart when there is an abundance of good deals available. But not in a market where buyers are lining up to see and make offers on homes.
Be ready to act if the right property comes up and don’t be afraid to be part of the home search.
I have represented hundreds of home buyers and sellers for 28 years and every once in a while a buyer will see a home that they really like, that fit everything they wanted in a home, was at the right price and yet they did not act because they felt that they had not seen enough homes or they wanted to think about it some more. While I do believe that you should see more than one home, the fact is that you know more than anyone if the first or second home that you saw is what you want or need. Time and time again homebuyers have decided not to pursue their dream home that they saw the first or second time out only to spend the next six months looking for a home that is like the home they passed up on. You will know, trust your instincts.
In addition, there is nothing wrong with you also helping your agent in looking for homes. Going to open houses and looking on the Internet along with your agent gives you more options and less of a chance that you will miss out on something. However, if you are the only one doing the work and your agent is waiting for you to find a home, find another agent.
Stay in touch with your agent through the home search and also through the offer phase, as well as the escrow period. It is of utmost importance that you do not lose touch or disappear during these important times. There has to be balance and you can’t be on a string, but in a strong home seller market where very few homes come on the market, stay in touch and be ready to see a home that may have just come up on a moment’s notice because it may be the only chance you have.
Get an agent who is not afraid to work
Choosing the right agent will make all the difference to you in your home search and will many times be the reason why you buy a home or keep looking for homes for months on end. Find a full-time agent who is not afraid to work, who is not afraid to knock on doors for you and who is connected with his or her peers and can network with other agents as well as potential home sellers to find out what is coming up on the market.
A good agent should be connected and should have their finger on the pulse of the market. The more people your agent knows, the more your agent networks, the harder they work at turning over stones to find the buried treasure, the better your chances are of finding a home. At the end of the day, it is really a numbers game and a good agent knows this and also knows that he or she can never know too many people, can never shake too many hands and can never have too many friends.
Do the above and before you know it, you will start to spend your time packing and getting ready to move into your new home.