Top 5 – Insight for Buyers
Top 5 – Insight for Buyers in today’s tight housing market are below. So, if you are a buyer, be sure to understand these insights into making your purchase.
Work with a knowledgeable Realtor.
All real estate is local, so it’s important to work with a knowledgeable Realtor, who is familiar with the areas and neighborhoods and understands contracts, negotiation and customer service.
Determine a budget and stick to it.
Before beginning the home buying process, prospective homebuyers should receive pre-approval from one or more lenders to verify the amount of money they’re qualified to borrow. Then – after considering additional costs of ownership such as taxes, utilities and insurance – buyers should create a final budget they can comfortably afford. When listings are scarce, bidding wars can drive up prices. Buyers must be prepared to walk away if the asking price surpasses their budget. Your agent can recommend several lenders who can offer different types of loans, depending on the property and your usage. For example, did you know that if you are buying a second home, rather than an investment home, you may find only 10% down payment required vs 20% down payment. That may help you leverage your money to buy more home.
Identify desired neighborhood and community.
Too many buyers dream about the cream puff home. What’s a cream puff home? A cream puff home has 100% of everything you want in a home. Keep in mind that everyone wants the cream puff home, because, after all, it’s perfect, right? Cream puff homes do exist, but because they are perfect in every way, they are also typically priced accordingly. Don’t expect to buy the cream puff at wholesale prices. Buyers may need to compromise on what they believe they want from a home and instead, focus on the neighborhood and community where they want to be. Then, find the 85% house. I know you are asking yourself, “What’s an 85% house?” The 85% house is in the neighborhood which best suits your wants. The house may not be 100% of what you want, but you can add things such as stainless appliances or hardwood floors. Think about you building your perfect home. After building and and living there for two years, you would likely think of 15% of things you would do differently if you built again. Hence, the 85% home. The one thing you cannot change in your home is the location, so be sure you like the neighborhood and community, before determining the home you want.
Be ready to act quickly.
In today’s market, homes rarely stay on the market long when priced right. So, when a house in your neighborhood of choice, meets your budget and has 85% of your needs, don’t hesitate. Be ready to submit an offer quickly, or you may risk missing out on purchasing the home altogether.
Bid competitively and limit contingencies.
It is tempting to submit a low offer as a starting bid in order to get the best price possible, but in today’s market, buyers need to put forward their highest offer from the very beginning or they’re likely to lose out on the home. It’s also important to remember that in multiple bidding situations it is not always the highest offer that’s most attractive to the seller, but the one with the fewest contingencies.