The truth is, buying on impulse is rarely a good idea when it comes to a home but buyers are often at risk of losing their dream home when they wait too long. For this reason, it’s also not a good idea to over-analyze in a competitive sellers market.
But how do you compete in a sellers market?
Let’s take a look at what you might want to know about shopping in a sellers market:
5 Tips for Finding Success in A Competitive Sellers Market
1. Do Your Research Before Homes Come on the Market
When a decent home hits the market, it doesn’t stay there for very long. This is especially true for property in nice neighborhoods. If you want to save time and be ready for such homes, it’s important to do your research in terms of due dates, disclosures and reports well in advance. You can request this sort of information from agents and let these know your viewing schedule is open for whatever comes on the market.
2. Have a Pre-Approval Letter Ready
Acquiring a pre-approval letter is where many prospective homeowners fall short with buying a home. It’s just so important to have a pre-approval letter ready as both agents and sellers simply will not take you serious without one. This conditional approval letter will show that you can actually complete the purchase but keep in mind that most agents/buyers prefer to see a pre-approval letter from a local bank or mortgage company as opposed to an online lender.
3. Avoid the Use of Stipulations or Contingencies
As you might know, many buyers include stipulations in their offers. For instance, a buyer can make an offer which requires certain inspections to be carried out before going through. While this might seem like a good idea for the buyer, most sellers will consider these contingencies to be little more than potential for the deal to fall through. Sellers will often choose simple offers for this reason but this is not a reason to waive important considerations or ignore issues with the home that might cause problems later on.
4. Start Strongly and Make the Right Impression
With the previous point in mind, you should also know that sellers pay close attention to the size of a first offer. The higher you start, the more likely a seller is to work with you for striking a deal. And that’s not to say you should offer more than necessary but rather to encourage buyers not to “play fair” from the initial point of contact.
5. Use an Offer Letter for Slight Advantage
Believe it or not, an offer letter can give you a serious advantage in a sellers market. Most buyers won’t take time to put this together and this letter is a sign of trust and commitment to most buyers. This also means you might have a slight advantage over potential buyers that make the same offer as you. As part of this letter, you will not only include the offer amount but also a short story about why you would like to buy the home and why they should want to work with you as opposed to other buyers.
It’s true, the pre-approval letter is arguably the most important piece of documentation you can have in a sellers market. But common sense and courtesy go a long way, while research and a straight-line approach will improve your chances even further.
To learn about pre-approval letters or to speak with a salary-based loan officer, call City Creek Mortgage today.