Six Survival Strategies for a Red-Hot Real Estate Market
It seems more and more real estate markets are heating up. Interest rates remain low and the desire for more space and better function is still growing among buyers. Before you join the fray, spend a few minutes looking over these strategies to overcome the competition.
1. Pre-QualifyStep one to house shopping in any market is to identify the lender you will be working with and begin the process of applying for a loan. In a seller’s market, this priority becomes even more critical. Any offers you end up making will need to be as strong as possible to stand out from the competition. Pre-qualification shows you’re serious about purchasing a home, have the necessary credit history and income to do so, and can cut down the time it takes to close.
2. Set a BudgetIdentifying a lender can also help to clarify your shopping budget. While the loan officer can determine the loan amount you may qualify for, only you can decide how much you want to spend. Work with your lender to consider payment estimates that include your down payment, property taxes and insurance. Closing costs are another expense you cannot ignore. In addition, fast-moving markets may expect you to have additional cash available to offset a low appraisal.
3. Expand Your GeographyStaying on budget can be tricky, particularly in places where home prices are continuing to rise. While you may have already identified the neighborhoods you want to target, consider expanding your search to communities where the competition is less fierce. Often, a realtor can suggest overlooked areas that can satisfy your requirements without breaking the bank.
4. Don’t Fall Too HardOne of the most difficult things about house hunting in a red-hot market is dealing with disappointment. More than likely, you will make offers that will be rejected. Sometimes being the highest bidder won’t be enough to beat out an all-cash buyer or someone with more appealing terms. It’s best not to start planning your future in a home until the keys are in your hand. Instead, remember there’s no perfect house, and be ready to move on quickly to find another one that meets your needs.
5. Consider a Fixer-UpperIf the houses that check the right boxes for you are attracting too much attention from other buyers, it might be time for a shift in strategy. Lowering your purchase budget could free up cash to create the home of your dreams. Reconfiguring spaces or adding bathrooms to existing square footage can be a cost-effective way to end up with a home that works. Rehabilitation loan programs, such as a 203(k) loan, are another option to consider if adding equity appeals to you, but you need help coming up with the funds to do it.
6. Trust Your RealtorFinally, the secret to surviving some real estate markets can come down to having the right real estate agent. A competitive house search can be stressful, so you’ll want someone whose personality won’t add to your frustrations. Experience and relationships in the local area can also make a huge difference. Proactively reaching out to colleagues can result in the opportunity to submit a late offer on a home with less-than-expected interest or being first in line when a deal with another buyer falls through.
Start your search with the experienced team at Open Mortgage. Explore our website for answers to all your home buying questions, or call today to speak with a representative.