The springtime market is traditionally the busiest time of year for buying and selling real estate.
Based on our experiences out in the field recently, we’re expecting this spring’s market to be no exception to this rule. If anything, we’re expecting it to be even more competitive than usual for buyers in our area. In fact, it’s starting to feel like an all-out war for some properties.
So, what’s a well-intentioned buyer to do in order to successfully purchase a home in such a dog-eat-dog market? Here are five tips to win your springtime house search:
1. Get pre-approved.
One of the most important ways you can help yourself to get ahead in the buying process is to get pre-approved for mortgage financing.
Getting pre-approved helps in two ways. First, it helps to focus you in your search for housing by giving you a better idea of exactly how much you can afford to spend. While it’s always good to do a broad search for property, you don’t want to waste time looking at homes that are definitely outside your price range. Second, and more importantly, having a pre-approval letter is an important part of the offer process. When you place an offer to buy a house, your pre-approval letter telegraphs to the owner that you’re a qualified purchaser, and therefore that you’re worth it for them to take the risk of withdrawing their home from the market for a few weeks while you prepare to close. Especially in competitive multiple-offer situations (“bidding wars”), which are more common in spring, having a pre-approval letter is a key to being the winning bidder.
Bonus tip — Early on, establish a good relationship with the mortgage broker who gives you your letter. You might need them to make quick adjustments to your financing status as you’re looking at potential houses, and they hold all the cards when it comes to actually getting a commitment from your lender. If your mortgage broker isn’t responding to you in a timely fashion or you’re uncomfortable working with them, shop around for a better option.
2. Leave no stone unturned.
Even though we expect the housing market to pick up quickly and substantially over the next few weeks, there’s still just not enough housing inventory out there to satiate buyer demand. That’s one big reason why we’re seeing so many bidding wars and crazy prices right now.
As a buyer, you need to give yourself options to make a decision that feels right. So, shop around. Look at everything in your price range. Go to open houses. Looks can be deceiving, and sometimes a home that doesn’t seem like a good fit online or on a listing sheet can turn out to be your dream home once you step inside.
3. Educate yourself.
Looking at lots of houses does more than give you options. The more homes you look at, the more you know about the market. It’s important for you, as a consumer, to have a feeling for prices and market trends in your area. For example, if it’s what you’re looking for, what’s a typical three-bedroom ranch with one bathroom going for in your neighborhood? The more you know about the market, the more comfortable you’ll be once you finally find the perfect place for you.
4. Be ready to act quickly.
A long time ago, when I bought my first home, the market was fairly quiet and it favored buyers. Houses were on the market for long periods of time, which meant there was plenty of time to window shop. And, when you found a house you were interested in, there was lots of time to schedule second showings, invite Mom and Dad and your best friends over to take a look, etc.
Not today. It’s always a good idea to educate yourself about the house you’re going to buy (caveat emptor), and you should never make a rash or hasty decision. But, be aware that today’s real estate market is moving fast. Like, lightning speed. When you do find a home you like, be prepared to move quickly to place an offer, because there’s likely a line of people out the door who are contemplating the same move. If you wait too long, it could be gone in the blink of an eye.
5. Keep calm.
Not to contradict ourselves here, but… notwithstanding all of the tips above… when searching for houses aggressively, don’t overdo it.
When housing markets get competitive, desperate buyers can do crazy things. People start skipping inspections, or promising to pay way too much for a house, just to be the winning bidder. Buyers become consumed by the game, and the process of buying the house overtakes all consideration of the property itself.
That’s all great, and we always try to advocate aggressively for our clients with a competitive bid. But, let’s be realistic for a second. Is it really a good idea to promise a seller you won’t back out of a deal if a home inspection reveals major flaws? Is it really a good idea to pay way more for a house than its assessed value? Is it really wise to promise to beat any other bid by $5000? Maybe it is, especially for the home of your wildest dreams. But, there’s a good chance it’s not.
Just because the market is crazy doesn’t mean you need to go crazy to find a house. Remember that you can be a victim of your own success. When you buy a house, you’re going to actually have to live there, and you’re the one who’s going to have to pay for it. So, take a step back and focus on the one thing that matters most — do you really want to live in this house? There’s more to life than just winning the bidding war. As the saying goes, if it ain’t right then it just ain’t right, so know when to hold ‘em, know when to fold ‘em, and know when to walk away from a potentially bad deal.
As a closing bit of advice, we offer you this bonus tip. As real estate agents part of our job is to help people to navigate crazy real estate markets. We can provide important information about the market, objective perspective, and guidance to get you through an otherwise hectic process. So, if you’re looking for help with the difficult job of finding a new home, as always, turn to us for assistance! We’re ready to help you win the springtime real estate war.