There are two types of buyers in the market right now: first-time buyers who might be living in a rental at the moment, and those who are looking to upsize or downsize (meaning they currently own a home they’ll need to sell).
For first-time buyers and those without a property to sell, start the process sooner than later. This is key because inventory is very low, so there won’t be a whole bunch of available properties to view at any given time, and the process might take longer. This is especially true if you’re a renter whose lease is set to expire in the coming months—start the process now so you don’t have to scramble later.
Secondly, get pre-approved. Don’t wait until you start looking for homes to ensure that you’re financially ready to purchase a home. Now is the time to start reaching out to lenders and get that conversation going. Also, be sure that you have enough money to close; that will put you in a much better position with the seller. Family gifts are a viable way to get a headstart on your savings, but asking a seller for help right now is not a good strategy in such a competitive market.
Also, try to be patient with the market and the buying process. It’s hard to be patient when you are so emotionally invested in the outcome, but understand that you might not get the first or second home you like.
Additionally, who you choose as your agent definitely matters in this market. Your agent should be on top of the off-market inventory, well connected and trusted in the community, a good communicator, and an excellent negotiator. Given how competitive the market is, don’t settle for an agent who can’t do it all. Networking is another critical skill for an agent to have; there are coming-soon properties that haven’t yet hit the market, and with the right networking, your agent can find those properties so that you can be the first to see and make an offer on them.
These same principles apply to buyers looking to move up or downsize. The only thing they’ll need to do is take into account how far along you are in your contract and listing processes. With each new step you take toward selling your current property, the more leverage you have to make a stronger offer on the new home. In this climate, contingent offers are off the table; you need to have your current home listed, preferably even past the inspection stage.
You could look into whether it’s possible to be approved without selling your house first. That sounds risky, but it’s a calculated risk; since we’re in an extreme seller’s market, you’re banking on your house selling pretty quickly, which means you may not end up stuck owning two for a period while you wait for the first to sell.
If you have any questions about today’s topic, don’t hesitate to reach out to us. We’d be happy to help.