Shopping for a home is a challenging task right now. Home prices went up 6.3% in December compared to the year prior, That’s likely due to high demand and a tight supply of homes.
That makes it a seller’s market, which means—as a buyer—it may be harder to land the home you want. Here are some strategies for making it happen:
Do some preliminary shopping. Determine when you’re going to start shopping seriously—that is, when you’ll be ready to start making offers on houses—and start looking two to three months prior to that date. That helps you get a feel for a market, for how things are priced, and for how the bidding process goes. (Do homes frequently go for above ask? How much above? Which homes?) You’ll develop a sense of what to expect from homes in that market. And that’s especially the case if you’re working with an experienced buyer’s agent.
Find a good buyer’s agent. Speaking of which, working with someone who really knows the area can give you a leg up, particularly if they have an ear to the ground. They might know about homes for sale before they hit the market or have some insight into what a home seller needs to close a deal.
Get preapproved. When you’re ready to get down to business, have a lender run your paperwork to determine how much mortgage you can qualify for. You’ll get an approval letter that outlines what kind of loan you can get. “Home sellers often find themselves in a situation where they accept an offer and then the buyers can’t qualify for the loan.They want to avoid that. Your preapproval letter can give you a competitive edge.
Offer to put more down. In many markets, a standard deposit with a home contract is 1% of the home’s sale price. If you can put more down than that, offer to do so. Your offer is a lot more attractive if you can make a deposit of 3% or 5%. Then they know that you’re not just a tire kicker, and that you’re really serious.
Find out what the seller wants. The best way to do this is to ask—either through your agent or by speaking to the seller directly. What are the seller’s priorities? Don’t make any assumptions. For a lot of sellers, their top priority is getting top dollar, but not all of them. Some sellers are relocating and want to close on the house as quickly as possible. So if you can show that you’re ready to go, you’re more competitive.
Be nice. Go the extra mile. If you’re house hunting on a snowy day, take your boots off at the door or carry a dry pair of shoes with you. If you use the bathroom, flush. Be thoughtful and courteous. And don’t say anything negative while you’re in the house. If you have something critical to say, wait until you leave. If there’s a buyer who’s rude, that might tip the scales in your favor if you’re the polite one. Make them like you.