How to Purchase Your Home in a Tight Market
We're all well aware of how crazy the market has been over the past year. It's been an incredibly tight market for those looking to purchase. Many will tell you they've never seen anything like it. Demand is sky-high, and inventory is low. But just because the market is tight doesn't mean buying is impossible.
A competitive offer with strong financials can keep you in the running even in the tightest markets. Today we'll discuss some of the key ideas and solutions to help you achieve purchasing your home evening in this challenging market. Let talk about how we can position you for success.
What Location are You Pursuing?
The first step after you have been prequalified by your lender will be to determine where you want to be. Do you see yourself in a home for a long period of time, or is this just a stepping stone for another location down the road? Driving around locations to see what areas you like and don't like will help your real estate agent narrow down the search criteria it will also help you understand and identify which areas you DON'T want to be in. Understanding what are nice to haves vs. must-haves on you your wish list will be an important discussion with your agent. While you're looking around, it's important to make sure you're working on getting all of your necessary documents together to get your preapproval. In tight markets, homes move fast, and only having a prequalification won't be as strong as a preapproval when submitting an offer.
The Importance of Funding for Your Offer
In tight markets, having a larger down payment can help you secure the home of your dreams. Putting down 20% or more can send a signal that you are serious about getting into the home. If you make an offer, but the appraisal comes in low, you as the buyer need to be prepared to make up the difference in cash. This means that you can't tie this into the mortgage loan. You will have to put up cash in order to secure the house and the loan.
Renovation Loans
In a competitive market, sometimes it's better to look into a property that may be on the lower side of your price range but needs some work. A renovation loan can be structured into a portion of your home loan and used for upgrades and repairs. Sometimes this allows you to get in at a price that is just right and still enables you to make it home of your dreams. Sometimes a fixer-upper is the best way to go.
We all know it's the most competitive market that we've seen in a very long time, but it's certainly NOT impossible to get into the home of your dreams. Don't get discouraged if you have to make several offers on different houses; just be as prepared as you possibly can by knowing what it takes and having the right real estate agent and mortgage lending company to have your back. Thinking strategically and being prepared will be the key to your success.
Call The Wood Team to learn more about how we can help get you into the home of your dreams or apply online today to get prequalified.
