When you start looking for a home to buy, it’s possible to have a rough idea of what you want, what you’re able to get on your budget, and roughly where; but nothing quite prepares you for the moment when you just know that a home is right for you. It cannot always be put exactly into words or neatly reduced to a number of contributing factors. You may have outlined to the real estate brokerage just what you are after, but sometimes the best description of your dream home is the exact property you just saw.
This is where, for many buyers, a real problem arises. At just that moment, you put an offer on the property and begin the anxious process of securing the home. It’s then that you realize there are ten other offers on the property, ten other cunning strategists in close consultation with their realtors…
There is no denying it, today’s property market is competitive for buyers. Right now just happens to be one episode in the up and down history of the property market in which the sellers seem to have all the luck.
Getting Ahead in Today’s Market
Utah real estate experts CityHome Collective have some useful advice for those who find themselves in the position just described: act with speed and circumspection at once. In recent times, the amount that a home sells for has been steadily increasing, total inventory is down, and homes are being snapped up after shorter and shorter periods on the market. This might all sound challenging (and it is) but it also means that many an early bird is locking down a dream property faster than they have before.
But this is not the first time the property market has experienced such a set of circumstances. Increased buyer demand relative to inventory is a phenomenon seen before. Accordingly, there is a wealth of advice, tips, and tricks for navigating a competitive market as a buyer.
Tips for Buying in a Competitive Market
Before getting on to some top tips for buying in a competitive market, it is worth pointing out that the biggest tip of all is to seek expert advice. This is not so much because of realtor expertise as the local market knowledge and the data analysis they offer. The following are general tips but working closely with a local realtor is the only way to come up with a truly competitive offer.
Get a Preapproval Letter
In today’s market, you have to dot the i’s and cross the t’s, and you can pretty much forget about securing a property without a pre-approval letter. Even a higher offer will not secure this (which is why we see lower offers often win out against higher ones). A pre-approval letter is a letter from a lender that states the value of the mortgage you qualify for.
Set Offer Limits Ahead of Time
This is an especially important tip. You need to move fast in a competitive market, and you sometimes have to bid boldly, but that only makes it more important to have your upper limit set before you even get started.
Make a Down Payment
One sure way to show sellers that you are serious is to put down around 5% to 10% of the asking price as “earnest money” or an “escrow deposit”. If you can do this right off the bat, then things can move very quickly in the right direction.
Tenacity and quick action are rewarded in today’s property market. But there is still no substitute for getting a game plan before you enter the field.