By Matt Carson on 4/13/2023 Tags: home buying tips mortgage basics
Become the best buyer you can be
When spring flowers bloom, the temperature isn’t the only thing heating up. Indeed, the housing market is traditionally on a yearly cycle where more sellers tend to put their homes on the market during the warmer months as opposed to the cooler ones.
More houses on the market attract more buyers. So, with the return of spring selling season, you can expect the market to become highly competitive. Inventory still remains low nationwide, which can further complicate a contested market. You’re going to need every advantage at your command. That’s where our experience in the industry comes in.
As always, we want to help you out, so we’ve put together a list of tips to help you move fast, deliver a winning offer, and land the home of your dreams like a boss. In short, here’s how you can become the best buyer you can be. Let’s dive in.
Get pre-approved and build your budget
When you put in an offer, you want it to have as much heft as possible. Several of the items on this list are designed to do just that. A critical first step, however, is two-fold: First, get pre-approved; second, carefully construct your budget.
Seeking pre-approval status from a lender sends the message to the seller that your offer is serious and that there are unlikely to be any of the usual complications that stop a home sale in its tracks. It’s peace of mind for the seller as a pre-approval signals that the deal can close quickly. Guaranteed Rate’s PowerBid Approval can give you a competitive edge with a fully underwritten credit pre-approval letter that demonstrates that you’re a qualified loan candidate, thus giving your offer the extra leverage it needs.
Pre-approval will also spell out just how much home you can afford. With that information, you can make out your monthly budget with a fair degree of accuracy. This will also be instrumental in helping you screen potential properties when you begin your search. There’s someone who can help you with that, which leads us to our next point.
Find the right agent
A real estate agent is going to add some serious fuel to your home search, but their role in your homebuying journey extends well beyond that. They are your advocate, ensuring that there are no unwelcome clauses in your contract as well as making sure that the price tag for the property makes sense given the other home sales in the area.
There are many things to look for in an agent. How responsive are they? How clearly do they communicate the information you want to know? The most important thing to keep in mind, however, is trust. Your real estate agent will be your partner during this process, so make sure you find one that you know you can rely on. If the agent you’re working with doesn’t inspire confidence, keep looking until you find one who does.
Have all your paperwork handy
Getting pre-approved will help with making sure all your necessary paperwork is present and accounted for. Here’s where the loan officer you’re working with can make the difference in getting all your documentation together, which can set you up for success down the road.
While you’re at it, be sure and set aside all your relevant identification that you might need, like your driver’s license, passport, social security card, birth certificate, and other forms of ID, in one place where they are accessible at a moment’s notice. You will generally need more than one form of identification for things like income verification and closing, so having them handy will save you a lot of last-minute anxiety when the time comes.
Know your must-haves and deal-breakers
The mental bandwidth and energies you put into a home search are not infinite. Chances are, you will be balancing this with work, family, and a social life. That’s why it’s important to sit down and really think about what it is that you want in a home, and — perhaps more importantly — what you don’t want.
Establishing those parameters early on will help you focus on the properties that really fit the bill. Buying a home will likely be the largest purchase you ever make, so don’t waste your time on something that doesn’t fit your needs. Having a clear idea, often in writing, of what you’re looking for can make sure that the home you wind up with is one that you really want.
Find the market value
Once you start house shopping, an important thing to know about each property will, of course, be how much it costs. There is often a bit of a difference between how much a seller is asking and how much the house is actually worth. The seller will want to make as much off of the sale as they can, which is why knowing the market value of a home can be the difference between you getting a good deal or just a mediocre one.
Your real estate agent can assist you with this. They can look up current property values in the area, which can fluctuate over time, as well as recent property sales for that neighborhood. This will give you an idea of the range of the house’s value. There’s almost always at least a little wiggle room here for negotiation.
Just remember that, if a bidding war starts (see below), you could be asked to go above the market price, so understanding where the property falls in terms of value will help you make a more informed decision about how much to offer.
Evaluate and inspect
So, let’s say that you find a home that ticks all the boxes. It’s in your price range, you like the neighborhood, and it has all the features you want with none of the ones you don’t. Congratulations, you’re off to a good start, but you’re not done quite yet.
You need to look at things like access to infrastructure and available schools. If you have a commute to work, what will that look like? What about grocery stores, restaurants, and theaters? Is there an HOA you’ll have to factor in to your budget? Take a look at the property from every angle to make sure it works for the lifestyle you want to pursue while living there.
Beyond that, you’ll want to order an inspection on the property before you buy it. Some sellers might pressure you to waive the inspection, but don’t do it. An inspection will be a neutral third party that can tell you if what you’re seeing is what you’re getting. You don’t want to buy a house to suddenly find that you have termites or bad foundation issues after the fact. An inspection is a good insurance policy for the buyer against unwelcome surprises.
Create your offer
Once you have a firm grasp on whether the property is right for you, and the approximate value of it, you’ll want to put together your offer. Once again, your real estate agent will be a huge help with the fine details on this as they present your offer to the seller.
Remember, however, that an offer is more than just the price you’re willing to pay. An offer might include footing the bill for repairs on the property, covering a percentage or even all of the closing costs, or any number of other details that will make your offer stand out from all the others. This includes the timing of your offer since most sellers will be eager to close on the house as quickly as people. As always, your agent should be able to give you some ideas on what can give your offer the edge it needs.
Speaking of giving your offer extra power, using Guaranteed Rate’s Same Day Mortgage can give your offer the same kind of punch as an all-cash offer. For eligible loans, you can even get a loan approval status in as little as one day, allowing you to close the deal with unrivalled speed.
Dealing with a bidding war
In a competitive marketplace, which is what you’re likely to face, the possibility of a bidding war is high. After all, if a property is a really great one, chances are that you’re not the only one who realizes it. So, when you’re faced with a bidding war, what should you do?
First, plan ahead. Expect there to be opposition and think long and hard about how you’re going to combat it. Ask yourself honestly: What is the absolute most you’re willing to pay for the home? How far will you accommodate the seller’s concessions or requests? Knowing your limits in advance will help determine how long you can stay with it if the bidding really heats up.
Second, be responsive. When new information comes in, be prepared to act on it — quickly. Speed can sometimes be one of the most important factors in a bidding war, especially if you’re competing against cash offers or a buyer with deep pockets. Once again, Same Day Mortgage and PowerBid (noted above) can help you with that.
As with many of the things on this list, your real estate agent will play a critical role as a liaison between you and the seller. That’s why it’s so important to have an agent who will really move on your behalf when the time comes.
Lastly, know when to walk away. This can be especially hard if you’ve fallen in love with the home in the meantime. While it can be heartbreaking to lose out to another buyer, the decision you make here is one you’ll need to live with for potentially decades to come, so be honest with yourself on when enough is enough.
Final thoughts
In the end, everyone should have the opportunity to live out the American Dream of having a place of their own. The road to get there may not be easy, and it probably won’t be, but it’s entirely worth it, especially when you think of all the benefits that come with owning your own home.
So, if you’re ready to start on your own personal journey to homeownership, we hope that these tips will help you become the most powerful buyer you can be to find, and secure, the home you’ve always dreamed of having.
Good luck, and good hunting!