The current real estate market is yielding the lowest inventory that we have seen in years, down more than 25% from this time just last year. This climate is not only causing some fierce competition, but it’s causing a lot of fear for both buyers and sellers as well. Buyers get discouraged because the competition is so fierce, and sometimes it takes a few offers before one gets accepted; sellers are hesitant to list their homes because they are afraid of coming up empty-handed on the buy side. It’s becoming a vicious cycle that can’t be broken unless inventory increases, and inventory won’t increase unless people are willing to put their homes on the market.
Your best strategy for moving forward with confidence is by working closely with your agent and trusting him or her to guide you through the process. Here are a few additional ways you can prepare yourself to win your dream home in this low-inventory market:
- Act quickly. Your dream home is going to come on the market, it’s just going to sell instantly. That means you have to be ready to buy instantly, including having your down payment ready and preapproval in hand when it’s time to make an offer. If you fall in love with a house before your finances are in order, chances are that love will end up unrequited.
- Speak the sellers’ language. What do you know about the current occupants of the home you want? Any information you canget your hands on about their careers, family and hobbies will help you determine how to best communicate your desire to purchase their home. For instance, someone who works for a nonprofit organization and fosters dogs from the local shelter will likely respond well to a seller “love letter” in which you confess your adoration of the home and how perfect it is for your family. On the other hand, that might be a turnoff to an engineer whose primary concern is numbers, but a strong offer with a sizable earnest deposit will make an impression.
- Be prepared for appraisal. Your agent will counsel you on what is appropriate to offer on the property you’re interested in, but if you really love something you may be willing to pay more than it’s actually worth. If you make that decision, make sure you also have the cash to pay the difference. Your lender will base your loan amount on the appraised value, not how much the home isworth to you.
- Know your loan options. The traditional options of conventional, FHA and VA loans are still valid, but there are so many more programs in existence today than even a few years ago. If you’re truly concerned about selling before you buy, talk to your lender about loan options that will allow you to purchase first. Then you can focus on selling your home once you’ve moved and settled in to your new place.
You don’t have to fear listing your home, you just have to be ready when it happens and position yourself for success on your subsequent purchase. Armed with these tools and your agent’s guidance and expertise, you can do just that. Happy house hunting!