If your area has seen real estate sales rebound in a major way, you may need to adjust the way you go about your home-buying search. Being ready to buy is never more important than when find yourself competing with lots of other hungry buyers for a smaller number of home listings. Read on for some tips that will have your purchase offer float to the top of the pile.
Be Willing to Pay the Asking Price
More and more, buyers are finding that trying to negotiate a lower price is fruitless when the competition is stiff. You must know what your top limit on a particular home is before you make your offer. Often, your real estate agent can clue you in on properties that already have multiple offers waiting. You won't be able to find out what those offers are, however, due to ethical rules. If your agent advises you to go in with a full price offer, do so. It's worth mentioning that really desirable properties can garner offers above the asking price, as well.
Have a Higher Down Payment Ready
What the bank requires may only be the beginning. If the home you want is in reach, you may need to up the ante by offering a larger down payment. Doing so assures the buyers of your seriousness and can speed up the lending approval considerably.
Don't Just Get Pre-qualified, Get Pre-approved
A pre-qualification provides you with valuable information about how much home you can afford, but taking it a step further is nearly always a requirement in a tight market. A pre-approval means that the lender has done a preliminary review of your financial situation and you now have a letter proving your ability to get a mortgage. Sellers will recognize a pre-approval as being a step closer to a deal.
Reconsider Your Contingencies
Almost all sales contracts contain contingencies, and most of them are vitally important. For example, one major contingency commonly found on contracts addresses the need to have lending approved. Other contingencies, however, address issues with the home itself rather than lending and appraisals. In a hot market, it may not be smart to place too many roadblocks in the seller's way when completing a home deal. For example, make sure not to clog up your contract with minor issues like a broken window, dirty carpeting, etc. Save your contingencies for major problems, repairs, lending, and an appraisal.
To get more tips on dealing with a home purchase when conditions are hectic, speak to a real estate agent.