How to get the home you want in a low-inventory market
You've probably heard that this is the perfect time to sell a home. The record low interest rates and low inventory market mean that demand is high and homes are selling fast, many above asking price with multiple offers. But what does that mean for home buyers? How can you find a home in a low inventory market for the right price? Here are a few tips for navigating a market with limited inventory.
1. Be ready financially Make sure that you have your financing secured before you go to look at houses. This means having your mortgage loan pre-approved. Ask your lender up-front how quickly they can complete your closing once you are under contract, as timelines can range from about 30 to 45 days. (A short closing timeline is usually very attractive to sellers who are selling a vacant home.) Know how much you can afford for a down payment, or how much is required by your lender, and have your earnest money ready. Typically, earnest money ranges from $1,000 to about 3% of the agreed-upon sales price. 2. Be open-minded and realistic about what you can afford Keep an open mind when looking at houses. Your goal should be to find a home that meets all of your needs and most of your wants. Be open to making changes to a home to make it exactly what you want. In low inventory markets, houses tend to sell over asking price due to competition from multiple offers. To make sure that you don't max out your budget on your initial offer, it's smart to stay away from homes that are at the absolutely top of your budget. You won't want to lose out because your full-listing price offer was beat out by someone offering $2,500 more.
3. Make the best offer you can
In a tight housing market, the way you choose to make an offer on the home you love can make a big difference. Most people have an emotional attachment to their home. Making an offer much lower than the asking price may result in your seller rejecting the offer because they think you're not serious or that you're going to be a difficult buyer. It's critical, especially in low inventory markets, that you put your best offer forward. 4. Hire a great Realtor You'll hear me say this again and again. You're going to spend a lot of time with your Realtor, so it's important to make sure you hire a real estate agent that you like working with. Your Realtor will know the techniques to use to get your offer noticed and can guide you through the entire process. While having your money ready and making a great offer are a big part of the process, having the right real estate professional representing you can make or break an offer.