In today’s competitive seller’s market, homes are selling in a matter of days. In a large number of cases they come on the market and get 4-8 offers within hours. As a seller this is a dream come true, but what about buyers? It can be very frustrating. How can a buyer win the home they like in today’s market? Here are some tips you might find helpful in becoming a successful home buyer.
1. Be pre-approved not just pre-qualified:
To be prequalified you will need to talk with a lender, run your credit and give the lender a verbal account of your income and expenses. The lender will tell you an estimate of the amount of home you can afford given the information you have provided. Taking the next step to be pre-approved will make you a much stronger buyer. To be fully preapproved you will need to turn in all of your financial documents, such as your pay stubs, tax returns and bank statements. The lender will not only review them, they will also send the documents to the underwriter who makes the final decision on whether or not the loan will go through. With the underwriter’s approval you are a very strong buyer. Often your loan will be able to close sooner if you have already completed this step, which is an additional bonus.
2. Be flexible on the closing date.
Some sellers will need to find their replacement home. If you are willing and able to let the seller remain in possession a week or two after closing they aren’t as pressured to move out immediately after closing. Another option is to allow the seller to rent back from you for a month until they can purchase their new home.
3. Have reserves to pay your own closing costs.
You can also talk with your lender about rolling the costs into the structure of the loan. With so many competing offers, sellers are not as quick to pay closing costs as they were a few years ago. Closing costs can be $4,500 to 3% of the purchase price. If you have your own funds, great! If not, there can be ways around it. Sometimes your lender can raise the interest rate by a 1/8 of a percent and roll your closings costs into the structure of the loan. This may not be an option for all buyers so make sure to talk with your lender to see if it would be beneficial to you.
4. Be quick on the draw!
The good homes are selling so quickly you need to be flexible in your schedule to view homes the same day they come on the market. If you see a home for sale on Thursday, there is a good chance it may not be available when you have a day off of work on Saturday. Talk with your boss about your process of buying a house and ask if they can be flexible to allow you to have an extended lunch and make up the time by staying late. It might make all of the difference.
5. Don’t get discouraged.
You may have to submit offers on several homes before we win the contract. With patience and persistence it will eventually all work out.
Partnering with a lender and Realtor who are experienced, work full time in the profession, and who put your needs first is key!
If you would like more information on how we are successful in winning homes for our buyers please give me a call, 303-912-3320.