The home-buying woes continue; here’s how to rise to the challenge.
It’s the new year, and so far, we’re experiencing most of what we’ve been experiencing for the last eight months of 2020: low inventory, super-low interest rates, and very high buyer demand. I’m hoping we’ll see a steady increase over time so buyers can have some relief from this relentless market, but for now, our shared reality is that of an aggressive, highly competitive market. If you’re looking for a new home at the moment or soon will be, you need to have a clear and decisive strategy in place. Here are three simple tips for how to win as a buyer in this 2021 seller’s market:
1. Fall in love with the numbers before you fall in love with a property. You need to talk to a lender and make sure you understand every component of your financing. Sadly, 86% of people skip this step, but it’s essential to avoid headaches later on in the process. Are you paying with cash? Are you financing your home purchase with a loan? Do you have the down payment ready, and if not, are you anticipating that those funds will be gifted to you by family? Do you know what your closing costs will be? What’s the maximum monthly payment that you could stomach? Do you know the difference between your “comfort zone” budget and your “stretch” budget? These are the questions that will need to be answered before you start looking for properties in earnest.
“You need to talk to a lender and make sure you understand every component of your financing.”
2. Get realistic, and focus on what you want. Right now, most properties are selling for above asking price if the home looks great and the price is right. Knowing this, you may want to set your expectations a little lower. In the past, when buyers had more inventory and more time to find a property, I’d help clients look at houses that were just above their target price range because the market allowed more room for negotiation. While deals still exist in today’s market, they’re few and far between. So, if you qualify for a $1 million mortgage, it may be in your best interest to cap your search at $950,000—with biddings wars as prevalent as they are, a property listed at that price could easily sell for $990,000 or $1 million.
3. Submit fast and strong. If you’re a smart buyer who’s done all their homework up front and know exactly how much you can afford, then be ready to pull the trigger. In this market, you need to act to win—don’t try to play games with the seller. If you want to learn more about what it means to submit a strong offer right out of the gate, then check out any one of the dozens of videos I’ve churned out on that exact topic over the past eight months.
I hope you found value in today’s message. If so, feel free to share it with someone you know who could also benefit from this information. If you want to chat with me about buying or selling a home, you can always reach out via phone, email, or direct message. I’m more than happy to answer your questions and provide some insight into your situation.