10 Hot Tips for Buying a Home in a Hot Market

Just yesterday my buyer lost out on a $155,000 townhome. We were in a multiple offer situation with four total offers. Although she offered full price with conventional financing, a large deposit, and a flexible settlement date, she didn’t get it.

MSN reports that demand for housing is causing the spring market to start in January as shoppers forge into an extremely competitive market. Housing inventory is expected to reach “record lows” in 2020. This is especially true for moderately-priced homes where the demand is greatest. 

Take this market seriously. Prepare to position yourself as the strongest buyer.

Here are 10 tips for buying a home in this highly competitive market:

1. Be patient. The right home is out there for you, but the process may take longer than you would like. With low inventory, the home search could take 6-9 months or longer.

2. Be prepared to lose out on several homes. It is not uncommon to write offers for several homes before you win out. This is because many home sellers receive multiple offers and yours is not the strongest.

3. Save up cash. Save, save, save! In this market, you do not want to have to ask the seller for seller assistance, meaning the seller helps pay closing costs. That’s money out of their pocket. Be prepared to pay your own closing costs.

4. Get conventional financing. If at all possible, do what you need to do to qualify for conventional financing. This is looked upon more favorably than FHA, USDA, or other government loans.

5. Make a higher down payment. Buyers look stronger financially if they put a higher down payment on their loan. Even if your loan only requires 3% down, try to put more money down.

6. Be careful with too many contingencies. Although I recommend a home inspection, sellers get scared off when they see a list of contingencies. If you have a concern, get it checked, but don’t add unnecessary inspections.

7. Cooperate with sellers on settlement date. If possible, have your agent find out before you write the offer on the most convenient settlement date for the sellers. Then use that date if you can.

8. Offer a substantial deposit. Your good faith deposit shows the seller how committed you are to purchasing the home. A larger amount makes a statement. This comes back to you at closing and is credited toward your closing costs.

9. Include a letter. In multiple offer situations, this can be helpful to the sellers, especially if several offers are similar. Include details you love about the property, a few things about your family, and leave out the negative.

10. Put your best offer in. A lot of buyers hold back in case there are negotiations. This may work sometimes, but when facing competition, put it all on the table and make the strongest offer you can!

If you have any questions about these tips or about the homebuying process, I would love to answer them. 

MSN full article: https://www.msn.com/en-us/money/realestate/competition-for-housing-is-so-high-the-spring-market-is-starting-now/ar-BBYyj7o?ocid=spartandhp

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