Winning a Home in a Tight Market: A Primer for First-Time Homebuyers
5 Things a First-Time Home Buyer Can Do to Make the Winning Bid
When the housing market gets tight, bidding wars become commonplace in cities and areas all over the country. It’s a natural occurrence, but for the first-time homebuyer, such competition can be intimidating. What’s worse than anything, though, is losing out on home bid after home bid. It can make one feel like they’re never going to end up with the home they fall in love with.
Luckily, there are some things a first-time homebuyer can do to help strengthen their negotiations. Here are five things any homebuyer, but especially first-time buyers, can do to improve their odds and land the home of their dreams.
Have as Big a Down Payment Possible Ready to Go
Regardless of the state of the market, having money saved for a down payment is required, unless you qualify for a VA loan. And the more money you have saved, the better. Having more money allows you more flexibility to raise your bid when you are forced to. It will also qualify you for a larger mortgage if need be.
But, be aware of how much home you can realistically afford. Don’t get lulled into the heat of competition only to find your winning bid is for more than you can actually afford to pay each month, once you factor in other expenses.
Get Pre-Approved for a Mortgage
Getting pre-approved for a mortgage is something that everyone should do before they start shopping for a home. But, despite this, not many people actually do. Some may get pre-qualified, but that’s not the same as being pre-approved.
As a first-time home buyer, your pre-approval letter will catapult you to the top of the negotiations list because it is proof that you have a mortgage already waiting for you. This allows the seller to sell their home faster, so that any offer that comes backed by a pre-approval letter is given that much more attention.
Be Ready to Decide
In a tight market, not much time is allotted to bidders to respond to raised bids. In general, things move a little quicker. Because of this, you must be ready to make your decision at a moment’s notice; do you raise your bid, or do you bow out?
This also means you shouldn’t make offers on homes you aren’t really interested in. After all, you could wind up with the winning bid on a home that doesn’t meet your wants and needs. Instead, focus on the home you want, make your strongest bid, and be ready to move.
Avoid or at Least Minimize Contingencies
The less a seller has to worry about, the better for them. Sometimes, to get the home you want, you might have to make sacrifices. This means you may have to agree to buy the home with few or no contingencies. This is a risk because it could cost you money down the road, but if the risk is worth the reward, then it is something for you to strongly consider because it will strengthen your bid.
Be Flexible With the Closing
If you aren’t in a position where you must be out of your apartment by a certain date, then you have greater flexibility compared to most buyers. You can use this advantage when you find yourself in a heated bidding war.
Let the seller know that if they accept your bid, you can grant them more time to move out and they can set a closing date that works best for them. This type of convenience can be enticing to some sellers because they are transitioning between moving out of their old home and into their new one, which is not always an easy process.
Start House Hunting Online at Homes.com
There are a lot of homes out there for sale; some you might like, and others you won’t. Using the online home search at Homes.com can help you avoid spending time visiting homes that don’t interest you. With Homes.com, you will save time and money searching for your ideal first home!