Home Buyers, Are You Up to Facing Today's Competition?
Buying a home in today’s market is tough. As a home buyer, are you up to facing the competition?! Are you really prepared and are you serious?
Market conditions in many areas are challenging, with limited inventory in multiple price points, and lots of buyers (due to pent up demand, and great interest rates, among other reasons) who want to buy and can afford to do so. In short, what these means is that if you want to buy home you likely will be facing competition for properties that come on the market that you like, and which fit your needs and budget.
Are you thinking that because of the pandemic homes are not selling quickly, and buyers are holding off buying?
And home prices are falling?
The statistics simply don’t support these notions. Indeed, we are seeing some records being made with the volume of sales rising, and a recovery to the slow housing market in early 2020 that has exceeded many expectations.
So how do you compete if you (1) are financially qualified to buy, and (2) are truly serious about buying a home now or in the near future?
GET PRE-APPROVED WITH A LENDER WITH A GOOD REPUTATION
This cannot be emphasized enough! If you are not a cash buyer, you need to be able to document in writing that you are financially qualified to purchase a home, and at what amount.
Relying on one of the online mortgage calculators purported to tell you what you qualify for is probably a waste of time, won’t be accurate especially around rates, and does not give you the financial confidence you should have to search for a home, knowing what you can afford and what your monthly payments are likely to be.
Additionally, no seller or listing agent will accept an offer without a written, and current, pre-approval letter that documents you are financially qualified to buy. And your Buyer Agent is going to want to know this, too.
Be aware that in these pandemic times many listing agents and sellers want to see a pre-approval before your request to tour the home will be approved. Just saying “yes, I can afford it” will not cut it. Remember…you are competing with other buyers who ARE pre-approved and can document it.
Are you serious about buying and want to be competitive? Don’t ignore this step!
WORK WITH A KNOWLEDGEABLE REALTOR
Your best guidance about what’s going on in your local market is going to come from a Realtor who is successfully dealing with buyers and sellers on a daily basis, not the Internet. A good Realtor knows the market conditions, can advise you on pricing and an overall offer strategy for the home you like, will help craft a competitive offer, plus assist you through the purchase process from beginning to end.
KNOW WHAT YOU NEED
When searching for a house knowing what you need is essential. While it’s always important, in this competitive market it’s even more critical to know what you really need…and not just have a wish list of items that probably isn’t realistic or essential.
Of course it’s fine to have a list of features that are nice to have, but you don’t want to decide on a property that does not meet your requirements just because it offers some of the goodies on your wish list.
With the limited inventory, and with the pandemic precautions and procedures that need to be followed, you can’t afford to waste time looking at homes that do not meet your needs, or missing out on those that can work. When you find the property that meets the requirements you will need to decide quickly…that’s tough to do if you aren’t even sure of what it is that you really need.
Bear in mind there are often, if not always, tradeoffs with listings you see – they might not check every box but still meet the majority of your requirements. Consider what you are willing, and able, to give up…or fix/add to the house later. If it’s not right, so be it. But don’t be so persnickety that nothing you see works because there is always something you’d like to have missing.
BE PREPARED TO MOVE QUICKLY
If you are serious and want to be competitive, you must decide pretty quickly about seeing a home, or homes, that meet your requirements AND then make an offer if it’s the one.
Chances are good others will be looking at the same properties, and making offers without delay. While responding quickly does not guarantee success, delaying a home tour or waiting a day or 2 to decide about an offer could prevent you from achieving your goal of buying a house.
To move quickly you need to know what you really need in a house, and have a current pre-approval letter so you can...
WRITE A STRONG OFFER
When you find the right property you must be prepared to make an offer. Depending on your market and price point you should probably decide quickly in order to not miss out, but you will want to discuss this with your Realtor who understands the local market conditions and what impact they have on your offer strategy and timing.
To compete effectively, you need to write a strong offer – it’s NOT just about price, but other terms and conditions that could be important to the seller and which might give you the edge. Can you compete if you are not a cash buyer? Of course – it’s not just about cash in many cases, especially if a cash offer is not a high as other offers with financing. But it depends on the seller.
In many markets sellers have a distinct advantage because of supply and demand, and often have multiple offers to choose from, so how do you have your offer come out on top? Read “Is Your Offer Dressed for Success?” for some tips.
Sometimes buyers do things that sabotage their offers, perhaps without realizing it. The good news is these are all avoidable. Don't make one of these mistakes if you want to be competitive!
If you truly are interested in buying a home, and many are, you need to be prepared to compete with other buyers. You can put yourself in the best possible competitive position with a strong and knowledgeable Buyer Agent, having a pre-approval (or proof of funds if you are paying cash), having a good sense of what you are looking for and need, and have the willingness to move quickly and make a strong offer on any property you like.
If I can help with your home search in the Carlsbad and North San Diego County area, or answer any questions about the local market conditions, please reach out to me at (760) 840-1360 direct or text.
My Playlist on my YouTube Channel, Homebuying Tips and Advice, provides a series of 23 short videos with important information.
While it’s not everything you should know the videos will answer some key questions for you, and perhaps raise some others for us to discuss.
You can download my Fall 2020 Buyer Guide here with some helpful information to get you started.
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If I can provide more information about homes for sale in Carlsbad and in surrounding areas, local housing market conditions, or assist you, friends or family in a purchase or sale, please call or text me at (760) 840-1360, or email me at JeffDowlerSolutions@gmail.com
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