Home buying can be tough in a seller’s market. We want to help you avoid these common mistakes.
Not being prequalified (or better yet, preapproved) for a loan
You might know that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio, and your high credit score — but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be prequalified from a lender.
Prequalification means that you simply told your lender that you are looking to buy a home and they give you an estimate of what you can afford based on the information that you give them. Nothing is verified at this point, it is only an estimate. Preapproval involves submitting a mortgage application, complete with providing verifying documents. Nothing says that you are serious buyer like a preapproval letter submitted with your offer.
Not making your best offer
Everyone wants the best deal without overpaying. When most people see the listing price of a home, they naturally wonder what they can really get the house for. Offering lower than asking price is a reasonable strategy, especially if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best tactic. If you are serious and really want the house, you have to go in with a strong opening offer. Low balling is not going to work when other offers may even be higher than the asking price.
Not being prepared for competition
If there is ever a time when a bidding war could be imminent, it’s during a seller’s market. No buyer wants to be involved in such a battle for fear of possibly going over budget. You have to set your budget and be willing to walk away or up your number. It is important to have a realistic number that is truly your outside number, so that you are prepared to make these tough decisions fast.
Not learning from your mistakes
There’s no shame in learning that your offer has been declined, but it’s easy to get frustrated if your offers are declined repeatedly. Learn from your last transaction so you can move in to your dream home. If you have missed a few, you have to be able to identify where you went wrong and be ready (offer-ready) for the next one.
Not working with a knowledgeable agent
In a seller’s market, it benefits buyers to get all the help they can find. If you have a good agent on your side, you’ll probably have a better chance of getting the home you want. Plus, in most cases, buyers don’t pay real estate agents; sellers do. When competing against other buyers, you have to be offer-ready. We know the market and can help you get what you want. We know the ins and outs and can save you time and money in the long run. Call Cain Real Estate today at 251-471-4488.