Since markets are moving fast, experts recommend sellers have their loan pre-approved and down payment ready before starting their search. Inventory is low and demand is high—a buyer needs to know exactly what their parameters are.

Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. The longer the negotiations, the more chance you could lose out to someone else who made a better offer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

While you have to compete in the current market, maintain your budget. You don’t want to end up paying more for the house than it’s worth.

Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:

Plan Ahead

You have to plan four months before you’re going to buy. Check your credit for accuracy and avoiding making any big purchases or taking on any big debt during this time.

Debt brings down your credit score and increases your debt-to-income ratio which are two critical things banks look at when qualifying and preapproving you for a loan.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.

Set Your Home Price

Don’t look at a $300,000 home if all you can afford is $250,000. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete. If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price.

If you do spot a great deal on a house, don’t wait days to make an offer. Since time isn’t on your side, we’ll help you spot a great deal with our knowledge of area home prices. Being educated and having professionals negotiate on your behalf could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.

Know that Cash is King

The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage.

Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal. A buyer can contribute more cash to cover the different between the appraisal and offer price.

If your appraisal is low, don’t expect the appraiser to come up in value. Appraisers are under scrutiny with the banks and they have to justify everything they do. They’re required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, as well as lender guidelines.

Appraisers use surrounding properties for comps and if there are only foreclosures, that’s a bad hand to be dealt. You can always review the appraisal for discrepancies and suggest different comps but don’t expect the value to change.

Get Preapproved By a Local Lender Before Your Search

Getting prequalified for a mortgage by a local lender gives a ballpark for what you can afford to buy and will streamline your search process.

If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.

Getting preapproved will also help you to compete with an all cash buyer.

When you know what you can afford and are preapproved, you won’t be shopping outside of your price range. It makes you a much stronger buyer when you can turn in that preapproval letter with your offer.

Limit Your Contingencies

Experts suggest having as few contingencies as possible to be an alluring buyer. Don’t overcomplicate your offer to the seller. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.

Experts advise making an offer based on a satisfactory home inspection. It gives you the opportunity to walk away if you find in an inspection that there are too many problems with the house.

Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home. As a seller, you’ll sell that home quickly. Then as a buyer, you’re much more appealing than a buyer contingent on a sale.

 

Be Flexible with Closing Dates

Let the seller know that you would be flexible on the closing timeline. Find out when the seller would ideally like to close on the house and see if you can match it.

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