Tips and tactics for buying a home in a seller's market
(BPT) - If you've been in the process of buying or selling a home this past year, or even considering it, you know it's been a seller's market for the most part. Inventory of homes available for sale has been low, creating more demand than the market can supply. Couple that with low interest rates, which make it a great time for prospective buyers to get more bang for their mortgage dollar, and you've got a marketplace in which buyers have been competing for nearly every listing. The forecast for 2019 is rolling in, and RE/MAX and others are predicting the seller's market trend will continue throughout the coming year, with millennials fueling the home-buyer pipeline.
If you're selling your home, that's great news. But it makes the homebuying process trickier. That doesn't mean you should wait to grab your slice of the American dream, however. An experienced, knowledgeable RealtorÂ® can help you navigate this marketplace and find a great deal on the home of your dreams. Here are some tips from the pros at RE/MAX for what you should be thinking about when considering buying a home.
Prequalification vs. preapproval. They're not created equal. Prequalification is basically preapproval light. In a mortgage preapproval, you do all of the paperwork upfront. Your bank verifies the amount you can safely afford to pay, and boom, it's done. Preapproval is attractive to sellers because it means you're more likely to get the loan. It's faster, too, because a large chunk of your paperwork is already done. It gives buyers a competitive edge in this tight market.
An experienced Realtor. Don't even think about starting the process of buying a home in a seller's market without an experienced Realtor in your corner. It matters in every market, but it's critical when the sellers are holding all the cards. A savvy real estate pro is much more than someone who shows buyers homes for sale. They've got valuable insights, insider knowledge and advice, and can counsel you through the entire process. Realtors have tips and tactics for finding the perfect home, and have the know-how to negotiate a great deal.
Interest rates. The Fed continues to raise interest rates, and financial experts predict we'll see a few more increases in 2019. Higher interest rates may lower some homebuyers' purchasing power, which is all the more reason to get out there now if you want to buy.
Low inventory. It's currently a seller's market because there isn't a glut of homes available for buyers to choose from. During the winter months, the inventory of available homes tends to drop even further. But this shouldn't discourage potential buyers from making offers on homes they love. An experienced Realtor is a huge ace in the hole for buyers when there is low inventory. He or she can guide you through the process, knowing exactly how much to offer to get the deal done.
Speed. Be flexible enough to get to showings quickly, shortly after the home goes on the market. If you love it, make an offer as soon as you can.
Your best offer. In a tight market, it's go big or (don't) go home. This is not the time to be cagey about negotiations. Figure out the best offer you can afford and go with it up front.
Buying a home in a tight market can be a challenge, but with a knowledgeable Realtor in your corner, you can still grab your slice of the American dream.