Finding a home you love and that fits your wants, needs, and budget can be a monumental task even in the best conditions. But in a tight seller’s market, you will also be faced with beating out your competition. A well-priced home in good condition will move quickly and likely have multiple offers. So, if you want to end up with the home of your dreams, you need to be prepared.
Before you even begin looking for a house, the first step is to make sure you’re in a comfortable financial position to buy. You should obtain copies of your credit score several months in advance to better help understand your position. You’ll also want to shop around for mortgage financing before searching for houses. In a hot seller’s market, it’s best to come to showings armed with a preapproval letter or a “proof of funds”.
With so many other buyers to compete with, timing will be essential. To be successful in your home search, you will need to be readily available at a moment’s notice. House hunting is not something to fit in when you can. If you are only looking when it’s convenient for you, you’re probably wasting your time. Be prepared to comb through listings regularly, go to viewings at the seller’s earliest convenience (rather than your own), and to follow up quickly if you think it’s a good fit. Not only will this be essential for timing, but can also help build a rapport with the seller.
Simply swearing to a seller that you have enough money for a down payment or that you will have no problem getting approved for a mortgage just isn’t going to cut it in a hot market. If you truly want to be taken seriously you’ll need to show up with hard evidence in hand. Come equipped with a pre-qualified loan, an approval letter from your lender, and a “proof of funds” from your bank. Actions speak louder than words, and showing up prepared will let any seller know that you mean business.
In a strong seller’s market, you are likely in competition with other buyers who want the house just as much as you do. So, if you know you’ve found the property you want, don’t wait to make an offer. A competitive offer comes with the least amount of contingencies. And you should be prepared to make an offer at asking price or above to really stand a chance. Also consider what the seller’s needs are. Are they looking to close quickly or at a later date? Are they looking for the best price or simply the lowest risk?
It’s true that some sellers are only concerned with how much money they can get for their home. But you will find that many others want to see their home to go to someone that will love it as much as they did. In these situations, it’s important to make an impression. Include a personal letter about why you think this home is the right fit for you. Give them a backstory about you and maybe even include a photo. This might not be the best approach for everyone, but it has worked for many people in the past and it might just work for you too!
Many prospective buyers don’t want to make an offer on a home that already has a pending contract. But deals frequently fall apart over finances, inspections, and other contract terms. If you believe you have found the perfect house but it’s already under contract, make a backup offer. It couldn’t hurt. If the current deal falls through or the buyer walks away, you will be in first place for your dream home.