Once you’ve taken all the steps to prepare for buying a home, you’re ready to begin the house hunt. But what happens when you realize there’s not much to look at? Finding few options, or maybe even nothing for sale in your price range is increasingly common for many homebuyers. The number of homes available to first-time homebuyers has dropped 12.1% since 2012. But hang in there. You can buy a starter home, even if your market has low housing inventory. Here are some tactics you can employ right away.
1. Offer a higher price — within reason It’s supply and demand 101: Prices rise when inventory is low and demand is high. We recommend to go in with your best and final offer immediately. You also need to be able to make up the difference in cash if the house appraises below your offer. Most lenders will not approve a mortgage for more than the appraised value. Also consider making a larger earnest money deposit. Instead of an industry standard $1,000 to bind the offer, consider $5,000. This shows the seller you’re serious, and it may make your offer stand out.
2. Act quickly, but practice patience Landing a home in a competitive market can mean a lot of “hurry up and wait. Be ready on a moment’s notice to make an offer on hot new listings. But be prepared. Although you need to be ready to pounce on a home as soon as it becomes available, the deal might not be right for you. Or your offer may be turned down.
3. Be flexible on closing dates Besides being fast on the offer, you might need to close quickly too. If your seller needs a quick closing because of a job relocation or divorce, your offer might have more weight if you can sprint to the closing table. But how can you speed up this process? If you’re preapproved, you may be able to close almost as quickly as an all-cash buyer. Your mortgage lender will have everything in hand to start underwriting your mortgage.
4. Rent the home back to the sellers It can be difficult for a seller to sync the sale of their home with their new home’s move-in date. In a competitive market, sellers could end up homeless if their home sells before they have a new home to move to. If you can postpone your own move, offer to rent the house back to the sellers for a short time. This might give the sellers the flexibility they need — and a competitive edge for you.
5. Write a great offer letter Many sellers, especially those who plan to keep in touch with their neighbors, care about who will buy their home. So craft a letter explaining who you are and why you love the house and neighborhood. Sellers love a good story and they want to see their pride and joy go to someone they like.
Published on 2017-03-22 14:32:37
