5 Tips to Help You Buy a Home in a Competitive Market
Here are five tips you can do to make yourself a strong competitor in a tight homebuying market.
Know the difference between prequalification and preapproval. A preapproval means that a lender has actually examined your credit and other expenses helped you determine how much mortgage you could afford given their underwriting guidelines. Submitting an offer with a preapproval shows you’re a serious buyer, ready and financially able to close the deal faster than a buyer without such an approval.
Avoid the contingency contract.
Just about every real estate agent will tell you that contingencies in a buyer's offer will quickly move that offer to the bottom of the pile. Contingencies, such as having to sell your home before closing on the other one, will certainly turn off sellers. Remember, there is very little inventory on the market today on a national scale.
Make a strong net-price offer.
There is always wiggle room in determining a sale price. However, be realistic. Offering more than 10 percent below the asking price is a quick way for the seller to turn down the offer. An experienced real estate agent will help you make a strong, nonemotional offer.
Gather your best down payment.
Present an offer with the highest down payment that you could reasonably manage. sellers are more likely to accept an offer from a buyer with a larger down payment for a variety of reasons, including the belief that a buyer with a larger down payment is going to more smoothly qualify for a mortgage.
For many buyers, gathering funds for a down payment is difficult. However, there are programs available across the country that can help a buyer add to the amount she's saved on her own. Remember, these down payment assistance products and programs are not limited to low-income buyers, and many are not just for first-time buyers.
Look for diamonds in the rough.
Buyers who are looking for their dream home will avoid homes that don’t have all of the latest bells and whistles and upgrades. Don’t be that buyer. Purchasing a home that needs upgrades or investments to bring it up to your standards may be worth investigating if the all-in cost can be managed. Not many people want to live through a home renovation, even a small one, but if you can look toward the finish line, a great home may be right in front of you.
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