Are you buying a home this year? Keep these five rules in mind to get the home you want in a seller’s market:
Save for a Down Payment
To qualify for a home loan, you’ll have to provide documentation of your income and debt. If you want to take advantage of the best mortgage rate, a higher down payment will make a big difference, and aiming for 20% down is ideal to avoid the higher interest rates and mortgage insurance premiums. Even if you can’t gather 20%, aim for the highest possible down payment you can to help your loan application for buying a home.
Hire a Great Team & Get Pre-Approved
Shopping for a new place to call home can be complicated. Fortunately, one excellent expert can lead you to others to help your real estate journey go smoothly. If you don’t already have a lender working with you and a pre-approval, ask your Realtor for recommendations on who they work with. Getting pre-approved is an important step, as it helps you know what your budget is for a home and makes sure you qualify for a loan. Most importantly, proof of a pre-approval or proof of funds is often required when you make an offer on a home!
Plan your House Hunt and Move Quickly
Our current market has a low inventory, and move-in ready homes sell quickly. With the strong buyer demand, it’s important to be ready to compete to get the home you want and to schedule a showing as soon as the home hits the market. Make sure your Realtor sets you up on a search to notify you as soon as a home that meets your needs comes onto the market.
Place a Strong Offer
As mentioned above, we are in a seller’s market, and many great homes enter multiple offer situations within days of being listed- and those offers are coming in near or above list price. If the home has been on the market for a month or more, you may have more room to negotiate on the price with the sellers. Ask your Realtor to check comparable homes in the area to verify the home’s value, and present your best offer immediately.
In a purchase agreement, there are areas for buyers to select contingencies for the sale, such as a home inspection and appraisal. If the home is newer or looks in great condition, you might opt to skip having a home inspection, which will both speed along the sale process and make your offer more appealing to the sellers. If you’re buying a home with a mortgage, many lenders require appraisals. However, if you’re a cash buyer, you can skip the appraisal contingency. Some buyers also request a contingency that says their current home must sell in order for this deal to go through. If you can remove this contingency, it gives sellers peace of mind and once again makes your offer more appealing than a similar offer that does have that contingency.
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