New Rules For Buying A Home In Today's Market
New methods of buying a home have emerged recently due to the continuously evolving real estate market that we've seen over the last three years. So if you're considering buying a home, you should shed any preconceived notions of the home-buying process... because it's all changed!
The days of soaring home values and bidding wars may not be over just yet. Although rising mortgage rates were projected to alleviate demand, the low housing inventory continues to be a challenge for today's homebuyers.
BUT, there are strategies to help buyers in this competitive market.
1. Get pre-approved and get your finances in order before you start shopping.
OLD RULE: Find a house, then secure a pre-approval.
NEW RULE: Lock in your financing before you start your search. If you want to act fast and be competitive when you find the perfect fit, it's crucial that you know your budget and have a pre-approval letter in hand. Homes are still selling very quickly, so you need to be prepared.
2. Search for homes listed BELOW your ideal budget / price.
OLD RULE: Shop for a house you can afford (and even negotiate on price).
NEW RULE: In this extremely competitive market where multiple-offer situations are still the norm, you will need to get aggressive with your offer, which more than likely means going above the list price, so you may want to leave some wiggle room in your budget.
3. Be prepared to make an offer the same day you tour a home.
OLD RULE: View a home, then take a day or two to decide if you want to make an offer.
NEW RULE: If you see something you like, you are going to need to put together a competitive offer as soon as possible. With homes selling quickly (some in under 24 hours!), today's homebuyers don't have the luxury of taking a few days to mull things over. Take time during your showing to slow down and look at the home in detail. Try to look past the seller's furniture and decor, and envision yourself in the space.
4. Submit your strongest and most competitive offer first.
OLD RULE: Offer below the asking price and wait for a counteroffer from the sellers.
NEW RULE: In a multiple-offer situation, sellers will not go back and negotiate with you or make any counteroffers. Make sure you are prepared to put your best foot forward and submit your strongest offer from the start.
5. Don't get discouraged if your offer wasn't accepted.
OLD RULE: Expect to buy a home after one or two offers.
NEW RULE: You might lose out on multiple homes, but don't lose hope. The seller will typically go with the offer with the highest price and/or fewest contingencies — which right now means cash or waived inspections. If you don't feel comfortable waiving inspections, DON'T! You will find a home, you may just have to be patient to find the perfect fit.
These few "new" guidelines can help you save time and energy, and ensure that the process of buying a home in today's market is as enjoyable and stress-free as possible.