After helping out a first-time homebuyer recently, I realized the advice I gave could be incredibly helpful for others to have. So today, I’d like to share the five tips you should know when navigating a seller’s market like the one we’re currently experiencing:
1. Be decisive. If you’re going to come out on top, you’ll need to be ready to make decisions. Time is critical in a seller’s market, and often, getting your dream home simply means being the first person in line. If you see the perfect home come on the market, don’t wait until the weekend for a showing. Set something up as soon as possible—if you can’t, I’d be happy to help set up a virtual showing for you. Speaking of which, you want an accessible, speedy real estate agent like me on your side. A responsive agent is a must-have in these markets where buyers need to act quickly.
2. Submit a clean offer. This may not be the best time to submit an offer with a long list of contingencies. Contingencies could mean the difference between getting the home of your dreams and missing out on it. A seller may be more interested in wrapping things up quickly instead of fetching a higher price but losing out on time. Think about dropping or at least modifying traditional contingencies; your offer may look more appealing because it means there’s a lower chance of you backing out of the deal.
However, there are still ways to protect yourself. You can get your loan completely underwritten by your lender, for example.
3. Let go of perfection. Inventory is limited right now, but demand is incredibly high. This situation means it’s less likely that you’ll find the perfect home, but that’s perfectly fine. Often, it’s better to settle with a good home and make it perfect instead of waiting forever for a property that may never come. Even when inventory expands, it’s rare for the “perfect” home to appear.
4. Be disciplined with your budget. Things can get competitive among buyers, and it’s easy to get carried away and offer more than you’re comfortable with. You may get so attached to a house that you go well above your budget, so set a maximum price point and stick with it. Sure, you may not get the house you were interested in, but you’re also skipping out on the years of financial stress that comes from overextending your budget.
5. Offer more earnest money. Earnest money is similar to a deposit and is provided alongside your offer. It shows you’re serious, but you’re able to get the money back if the deal doesn’t go through. Buyers in our market usually offer 1% of the purchase price, but it’s a good idea to offer more in a hot market. It shows you’re more interested and are less likely to back out of the transaction.
If you’re thinking about jumping into the market and buying a home, let’s set up a free consultation and go over what you’re looking for, what you can afford, and what your current home (if you have one) is worth. Whether it’s in person or via phone call, Zoom meeting, or some other virtual means, I’d be happy to walk you through your specific home buying situation. To set up a consultation, just give me a call at (608) 345-6594 or email JDHolt@KW.com. I look forward to hearing from you soon.