Finding Home Value in a Hot Seller’s Market
Increasing demand and rising prices are making it difficult to find bargains in today’s real estate market. Instead, many buyers are competing with multiple offers and agreeing in advance to fund the gap that can occur with a low appraisal.
Despite the challenges, there are still some strategies available to those who prioritize value above all else. Of course, as is often the case during a home search, the benefits of these approaches may require compromises to your dream home checklist.
Regardless of the market, buying a home remains a solid long-term investment. Even buying during a seasonal peak isn’t likely to hinder your ability to build equity over time. However, one of the ways to jumpstart the process is with a proactive plan to add value.
Rather than search for a move-in-ready home, consider pursuing houses that have potential but aren’t there just yet. Focusing on unfinished spaces, total square footage, or a flexible layout can help you identify homes where adding a bedroom or bathroom may be a cost-effective solution. Renovation loans, such as the 203(k) or HomeStyle programs, are useful for buyers willing to embrace them. Having the patience for home improvement projects can mean avoiding some of the up-front competition and enjoying a faster path to equity.
Spend More to Save More
It might seem counterintuitive, but a bigger budget might be the key to not overpaying in some cases. Currently, investors and first-time homebuyers account for a substantial part of the demand around the country. Their targets are often lower priced properties, which means bidding wars can be more common at this end of the cost spectrum.
More expensive properties may not attract as much attention from these buyers and create an opportunity for those willing to spend a little more. While your monthly payment may be higher, you may find a property that offers more and a purchase price that feels less inflated and avoids the need for more cash to make up for a low appraisal. Working with a lender you trust can make it easier to explore your options and understand exactly how much home you can afford.
One of the most effective ways to navigate a seller’s market is by working with an experienced Realtor. Their relationships with other agents can make all the difference when it comes to finding a home.
In high-demand areas, sellers often collect offers over several days before choosing the best one. Sometimes, less than expected interest will have the listing agent scrambling for additional offers or even an initial one. Agile buyers may be able to come out on top with a last-minute bid that doesn’t break their budget. Similarly, sales contracts can fall through and leave sellers looking for a quick backup buyer to step in. A sharp agent will position you as that buyer for the homes you loved but may have initially lost.
The success of your home search starts with the strength of your lender. Discover how Open Mortgage can simplify the process on our website, or call today to find out more.