The New Rules for Home Buyers
When it comes to buying a new place, the rules have changed for home buyers. For the first time, studies show that the median home price has pushed above $250,000. On top of that, inventory remains far short of buyer demand.
So what does this mean for home buyers? You must be ready for higher prices and tough competition.
As home buyers prepare to make their next purchase they will want to follow these “new rules.”
Be Ready for the Long Haul
Given the current market conditions of low inventory and strong demand, buying a house is not necessarily going to be an overnight process. Home buyers should expect the process to take at least three to six months while also being prepared to slog it out for a year.
Home buyers must also factor in the possibility of finding themselves in a multiple-offer situation. This means that you could be fighting for the house while driving up the asking price in the process.
So for those home buyers with a deadline for moving, you need to get the process started.
Be Pre-Approved
To set yourself up for success, home buyers will want to first take the steps needed to get pre-approved. This process might seem a little tedious, but if you are serious about buying a house, it is non-negotiable.
Potential home buyers will want to be pre-approved for a couple of reasons. First, by knowing exactly how much you will be approved for it prevents you from looking at homes that fall outside of that range. This can save home buyers a lot of time and heartache as you will not fall in love with a home you cannot afford as you will (hopefully) not even consider it if it does not fit in your budget.
Secondly, pre-approval signals to the sellers that you are serious. Sellers are not trying to waste their time being led along by buyers who have not yet lined up financing. If you are not bringing a pre-approval to the table, the sellers will quickly move past you.
Avoid Going (too) Low
We get it: home buyers want to land a new home at as low of a price as possible. However, given the market’s situation, this can be a surefire way to get your offer ignored. Due to the tight inventory, sellers are receiving interest at their full listing price. By coming in too low you could immediately find yourself out of the running without the chance to make a counteroffer.
Be Careful with Contingencies
There are some contingencies that buyers will not want to forego and others that can be negotiated. For example, if you are working with a lender to finance the purchase, you will need to have an appraisal contingency in order to receive the funds. Or maybe you require a home inspection so you know there are no major issues hiding.
But sellers are not always fans of contingencies as they are typically put in place to protect the home buyers. So if there are some smaller contingencies that you are willing to bypass, it could
Be Ready to Act
When a market is moving fast, buyers will need to act in kind. In extremely hot markets it is not uncommon for a home to be sold before a potential buyer even has a chance to check it out.
For this reason, home buyers must be ready to act when they come across a property that works for them. This is not to say that you should rush a decision that you are unsure of. But if you come across a home that checks off the boxes you are looking for and is in a price range that will work for you, then you have to ready to go for it. Taking an extra night to sleep on it could be all that is needed to miss out.