While some may argue about what season is the best for real estate transactions, there’s no debating that some serious home buying buzz gets created every spring.
So if you’re a potential home buyer looking to get in on the action, read on and find out how to maximize your chances of moving into your dream home by summer.
Spring 2017: A Seller’s Market
One of the trends this spring is a lack of inventory. There’s almost always a flood of buyers in spring, which creates competition, but with a relative scarcity of new homes for sale the competition is compounded.
Spring 2017 is definitely a sellers market, so buyers need to act accordingly in order to optimize their chances of getting the home they want at a satisfactory price. Here are a few things to keep in mind:
1. Be decisive
Just because it’s a sellers market doesn’t mean that they want to wait all day until they get the offer of their lives. Few homeowners like cleaning for showings and holding open houses for strangers to come and inspect every corner of their home.
That means if you show up to view homes right as they hit the market and proceed to swiftly make offers, you will probably be better off than buyers who are going to showings late in the weekend and hesitating to make offers.
As the saying goes: fortune favors the bold.
2. Prepare yourself for disappointment
Not to be a downer, but a competitive market means it’s likely that there will be several offers on the home.
A bidding war is riddled with uncertainty, as you never know who you’re going up against. Unless you’re planning on putting in an offer that’s well-above asking price, you face the very real possibility of losing the house to another buyer. It’s a fact of the home buying process, and it can be extremely frustrating.
One way to lessen the blow is to accept beforehand that it might happen.
It can be tough when you’re falling in love with a newly renovated bathroom or kitchen, but trying to stay emotionally unattached during the process can help mitigate stress, and will ultimately make for a more enjoyable home buying experience.
3. Make a strong offer
To build off of the previous tip, you’re definitely not doing yourself any benefit by tossing out low-ball offers in a seller’s market. With multiple offers on the table, sellers are less inclined to play games with buyers.
Everyone always wants to get the best deal on anything they’re buying, so it’s natural to want to see if you can haggle your way into a sale below asking price. And that might even work during other times of the year when there are less buyers, but it’s not a smart strategy in a seller’s market.
So take your time, think about things, and come in with a strong opening offer.
4. Give yourself some room to bid
It’s been established that there’s a very real possibility of getting into a bidding war. And while making a firm first offer is a step in the right direction, chances are you will have to go higher.
That’s why you should search for homes that are below the top-end of your budget. This way you can make a strong initial bid and still have room left to run, if need be. Looking at homes that are all at the limit of your budget can leave you feeling frustrated and dejected when you can’t compete with other bidders.
5. Get Pre-Approved
Sellers want to know that the buyers they are dealing with are for real. They are living in a world of unknowns, and have no idea about your income, credit score, or debt to income ratio.
That’s why you need to get pre-approved: so they know for sure that you are a qualified and capable buyer.
With so many buyers on the market it’s virtually guaranteed that you will be competing with borrowers who are pre-approved. And when it comes down to filtering out prospective buyers, anyone with a pre-approval has a much higher chance of making the cut.
Not only will it show that you are pre-approved at a certain loan amount, but it tells sellers that you are a serious house-hunter who isn’t going to delay the transaction.
Spring is kicking into gear and that means many buyers and sellers are getting ready to make a deal. Buying a home this spring might be a challenge for some house-hunters, but if you follow the tips outlined above, the only thing you’ll have to worry about when summer comes are your tan lines.