A real estate market is considered balanced when there is an equal number of buyers and sellers. A balanced market makes it possible for buyers to find a home they like and sellers are able to get a fair asking price in a reasonable time frame.
In contrast there are times when the real estate market is saturated with more inventory than there are buyers. This can result in falling prices and the buyer holds more control in the real estate transaction.
Currently in the Upper Valley and many parts of the United States there are more buyers than there is inventory. This makes it extremely hard for a buyer to find a home they like and then even harder for their offer to stand out in the crowd.
This can be a frustrating scenario for buyers but there are a few things that you can do to give you the best chance at having your offer considered.
1. Know What You’re Looking For –
Competing in a hot real estate market can blur your vision of what you really want in a home. The best thing to do as you begin your search is to sit down and write down exactly what you’re looking for in your new home. What are your must haves and what would be some nice bonuses. Then refine your list so you call out the absolute non negotiable features. Keep this list handy so that you can refer to it as you tour homes before you make an offer.
2. Get Your Finances In Order –
When there is high demand for houses it is imperative that you ensure that you are prepared for the purchase on the financial side. The first step is to discuss your loan options with a local mortgage broker. They will take the necessary steps to review your credit and evaluate your debt to income ratio in order to provide you with a pre qualification letter that you can share with sellers when you make your offer. When there are multiple offers on the table, you can stand out from the crowd for having your finances and loan in order at the time you make the offer.
These days it can be tempting to look online for a mortgage but a local lender who works regularly with local agents will give you the upper hand in a hot market.
3. Find a Local Buyers Agent –
Working with a buyers agent has no cost to the buyer. The fee for this service is paid by the seller at closing. However working with a skilled real estate agent is invaluable to the buyer. Not only will they be the first to hear of new listings but they can provide current insight on the local market as you search for a home to purchase. As soon as you’re considering buying a home it’s wise to partner with a local agent.
4. Begin Your Search –
Once you have your must have list for your new home set, a purchase budget determined with your mortgage broker and a local buyers agent you’re working with, it’s time to begin the search. Your agent will alert you to new listings but you can also search a variety of websites that show real estate listings. In addition to searching homes listed for sale, it’s smart to let friends and family know you’re in the market for a new home. You never know if someone is considering selling and might give you a heads up on a great property.
5. Craft a Strategic Offer –
Crafting your offer will require the guidance of your real estate agent. You will likely want to offer full price or perhaps above. Your agent can advise you on the process, complete the offer documentation and go over the benefits and draw backs of adding certain contingencies.
It’s always wise to have a home inspection contingency but it’s possible you may consider shortening the contingency period. A clean offer would have very few contingencies built into the offer. For example, asking for money back at closing is a common practice that it might be wise to avoid during a sellers market.
6. Make it Personal –
In a multiple offer situation you might assume that the seller will choose the highest offer however that’s not always the case. In addition to making your offer stand out with a local mortgage broker providing a pre-qualification letter you can also add a personal letter and introduction of yourself and your family. People want their home to be loved by the new owners and adding this personal touch can go a long way when multiple offers are on the table.
7. Be Ready for Multiple Offers –
When a seller receives multiple offers this can create a bidding war situation. In this case the seller would go back to those that made their offers and ask for their best and final offer. This is when emotions can come to play. Remember your list of must haves for the property and stick to your budget. Patience and persistence is important in today’s real estate market.
Frustration and emotions can run high during a hot real estate market that favors sellers but stay focused on your goals and understand it could take a little time to find the right home.
Legacy Mortgage, LLC is a mortgage broker serving the Upper Valley area and beyond. Our team has a collective 70 years of lending experience and we will work with multiple lenders to get you into the best loan option possible. If you are starting on your home buying journey you can request a quote or give us a call today at 603-643-7400 and we can get started on your pre qualification.