With inventories tight across many markets, home buyers are facing increased competition as they fight to snap up the limited number of homes available.
“Attempting to purchase a house in this type of market can make the already complex process of buying a home even more overwhelming,” the National Association of Realtors said in a recent release.
As such, the NAR has come up with a number of suggestions for home buyers looking to navigate today’s extremely competitive market:
1. Create a budget and stick to it
Buyers should get pre-approved by one or more lenders to ensure no delays. In addition, budgeting also means taking into account the additional costs such as taxes, utilities and insurance. Buyers should be aware that when listings are scarce the possibility of a bidding war becomes much higher, which means they should be prepared to walk in the event the bidding exceeds their budget.
2. Identify your wants versus needs
Wish lists might need to be compromised on if competition is too intense. For example, you might want a stainless appliance or hardwood flooring, but do you really need it? These can always be added later, the NAR points out.
“However, if a buyer wants to be in a specific school district or have a decent-sized backyard, those cannot be addressed later and must be taken into account during the house hunting process,” the NAR said.
3. Decide quickly
Properties rarely stay on the market for long when things are so competitive. As such, buyers need to learn not too hesitate if they find a house that suits their needs.
4. Make sure your offer is competitive
In a seller’s market a lowball offer just won’t work, the NAR advises. As such buyers should go ahead and make their best offer right away or risk losing out. Still, the NAR warns that when multiple bidders are competing for the same property the highest bid may not always win, but says bids with fewer contingencies will surely be very attractive.
“Removing restrictions related to the sale of a current home and being flexible with things like the move-in date can make a bid stand out to a seller,” the NAR said.
5. Use a realtor
The NAR also urges buyers to work with a real estate professional, as they are more likely to be familiar with suitable neighborhoods they’re looking for.
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