January 10th, 2020 | Purchasing a Home
The housing market moves up and down like the waves of the ocean. It can go from a buyer’s market to a seller’s market in a matter of months. That can be extremely frustrating as a buyer and it might make you start to feel desperate to find something quick. A home purchase is such a huge investment though, that you should guard against lowering your standards or jumping out of your price range. Here are four important tips for keeping yourself from becoming a desperate homebuyer in a seller’s market.
Before you even start looking at homes, it is smart to have pre-approval letter from your lender. Lenders and their agents will not take you seriously as a buyer unless they see you have done the footwork to secure a mortgage loan. This means you should also have already saved up a down payment and extra cash for the mortgage closing costs. Your lender can use this information as well as your credit score and other documents to determine how much home you can afford. Getting pre-approved will help you know how big your budget is when you start looking at properties.
Just because spring is when the most houses are on the market does not mean it has to be the right time for you to buy. Since spring is the busiest season it also means there are more buyers and more competition. That means higher prices and potential bidding wars. Fall and winter can sometimes produce motivated sellers who are willing to lower prices or throw in deal-sweeteners. Even if you are moving to a new city for work or you want to get into a new place before your kids start the new school year, there are always options. If the market is too hot, you could rent for a while to wait it out. Make sure the time is right for you, instead of trying to time the market just right.
There may be a few times in ultra-hot seller’s market when buyers have to make squeaky clean offers in order to be contenders, but if you are not buying in one of those markets, you should always ask for a lower price. You’ll never know if you don’t try and it will help you from just being a desperate buyer who just accepts whatever the sellers ask. Even if you can’t get the price lowered, the seller may be willing to negotiate other terms or costs.
Keep a good perspective when shopping for a home purchase. While you may feel like you’ve got to grab a house now, remember that there is more housing out there and always will be. Sometimes we get attached to a particular property and think that is THE one but it is surprising how quickly buyers can fall in love with another home if the first one doesn’t go through. Keep in mind how big of a decision and purchase this is and do not give into a perceived sense of desperation.
While it can be difficult to lose out on properties or feel like the housing market is passing you buy, resist the urge to buy the wrong property at the wrong time just to get into “something.” Your remorse over choosing out of desperation will be so much greater than your regret over letting a property slip away. When you have saved up, made your mortgage plans and chosen the right time for you, a good home is bound to turn up.
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