6 Tips to Help Homebuyers in a Seller’s Market
While doing the legwork for underwriting is substantial compared to pre-approval, you will need to do that work to finalize your loan anyway. Doing it upfront for pre-underwriting gives you both confidence in their budget, which means you can give the seller certainty that your funding will come through. Many sellers consistently choose offers for that reason.
Search with the market in mind.
Appraisal gaps are a reality in today’s market, and it’s important for buyers to be aware that they may have ground to cover. For that reason as well as the likelihood of any given home selling above list price, you may want to expect that the top end of the search price range should be significantly under the top end of the budget.
Tour unexpected neighborhoods.
Buyers who are open-minded to different neighborhoods often have a less stressful experience than those that are hyper-focused on one buzzy zip code. It’s worth a drive to explore adjacent areas with less interest.
Be open to PMI.
Buyers should be aware that putting less than 20% down is more common than they may think, and that they may be able to put more of their budget toward covering an appraisal gap if they buy with less down. With today’s lower mortgage interest rates, their month-to-month mortgage payment even with PMI factored in may be very reasonable.
Make it easy for the seller.
When there are multiple offers on the table, it’s even more important for your agent to send a strong summary email along with your offer and to follow up regularly while the seller is considering their options.
Start with your strongest offer.
Even with unprecedented levels of competition, some buyers are tempted to test how low they can go. Instead of testing the bottom, assume the seller won’t counter. They’ll just move on to the next offer.
Being ready to offer quickly is also key to winning in a competitive market, and considering these tips before we find the home you want to buy will help you feel ready to jump when the moment arrives.