Although Covid-19 has impacted our economy, the housing market has not been negatively affected. Compared to the great recession of 2008, where the housing market was at the center of the crisis, home prices are actually rising, not falling.
Rising housing prices are a result of the lack of supply, as there are many buyers entering the market every day and simply not enough inventory to keep up— which can lead to multiple offers and bidding wars.
According to a recent survey conducted by Realtors Confidence Index, on average there were about 3 offers on a home that closed in May, up from about 2 in April.
If you’re on the hunt for your next home and concerned about potentially being caught in a bidding war, don’t worry— we have some helpful tips to help you come out on top.
Helpful hint #1: Get pre-approved
Getting pre-approved is quite possibly the most important step you can take in the beginning of the home buying process. You should do this before you ever step foot in a Realtor’s office and before you even browse for properties online.
Unlike a pre-qualification, which is traditionally an automated review of your credit report, credit score and stated application information, a pre-approval scrutinizes every aspect of your creditworthiness.
A pre-approval determines exactly how much you may borrow under a specific mortgage program. It’s also a great way to distinguish your offer in a highly competitive, low inventory market. In other words, once you’ve obtained your pre-approval you can shop for homes with confidence! Get pre-approved now and shop for homes with confidence.
Helpful hint #2: Get your mortgage from a local company
Would it surprise you to find out that shopping locally for a mortgage is actually one of the best things you can do when it comes to having your bid accepted?
“A lot of people think that the highest bid is the one the seller automatically chooses— and ultimately there’s a lot more to it than that,” says Allen Tate Mortgage’s Vice President of Loan Origination, Lisa Green.
“Good Realtors will advise their clients to look beyond the dollar signs of the offer— not that offer price isn’t something that’s important, because it is, it’s just not the only thing sellers should consider,” says Lisa. “Just like conditions are important to weigh in the decision process, sellers should also think about whether or not the prospective buyer has been vetted and truly pre-approved by a local lender.”
Having a local lender who understands the market is key, Lisa explains. “Having market knowledge enables an underwriter to easily tackle each element involved in going from contract to closing.”
Find a local, experienced mortgage professional with Allen Tate Mortgage today.
Helpful hint #3: Make a clean offer
Normal contingencies— things like an inspection or available financing— are to be expected and won’t throw the seller off.
On the other hand, attaching too many contingencies to your offer— especially in a seller’s market— could seriously impede your ability to get the offer accepted. Work with your Realtor to decide which contingencies are best to include in your offer.
Related reading: Requesting repairs after a home inspection: What’s acceptable and what’s not?
Helpful hint #4: Understand the market
In a seller’s market each home for sale may receive multiple offers, due to low home inventory levels. So you’ll need to come to the table with a strong offer or you’ll likely be kicked to the curb fairly quickly.
Fully understanding the market can help you be highly competitive. Your Realtor will work to pull data from recent home sales that match or closely resemble the value of the home you want to purchase. Use this information to make a competitive offer.
Want to get a head-start on gaining market knowledge in a specific area or neighborhood? Sign up for Market Report and keep track of current listings, average list price, days on market and more!
JULY 16, 2020 - BY MARKETING@ALLENTATE.COM