August 29th 2023

While today's market is not as fast-paced as it was when interest rates were still around 3-4%, it is still very competitive due to lack of inventory.  Don't let that spook you, however, as real estate continues to be the best investment for your hard earned money.

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Buyers will need to take some extra measures to compete with other house hunters looking for homes at a good price. To nail a perfect home in today’s housing market, follow these five new rules.

1.  Be Prepared for a Lengthy House Hunt

Given the present scarcity of available housing, the process of purchasing a house may extend from three to six months, and possibly even up to a year in the most competitive markets across the nation. Adequate preparation for this timeline is crucial. The likelihood of encountering situations involving multiple offers is more prevalent today than in previous years, complicating negotiations considerably. It's advisable not to anticipate a swift move. For those facing impending relocation deadlines, initiating the home search promptly is highly recommended.

2.  Secure Financing Before Commencing Shopping

The days of attending home showings without first securing financing are no longer viable. If a mortgage is required for the home purchase, obtaining pre-approval for a home loan prior to visiting any properties is essential. This is because lacking a lender's pre-approval letter could diminish the seriousness of the buyer's offer. The absence of funds could potentially lead to the offer falling through, even if genuinely intended. In the current competitive market, this aspect holds significance. To explore mortgage options comprehensively, consult with a minimum of three lenders, which may include banks, credit unions, mortgage brokers, or a combination thereof. Gaining a good-faith estimate, delineating the mortgage terms such as interest rates and fees, is essential for making an informed comparison and securing the best deal.

3.  Avoid Lowball Offers

For those making offers on homes listed at or slightly above fair market value—indicative of homes priced to sell—it is advised to present the best offer upfront. The notion of offering the full list price or slightly below should be acknowledged. Although this might challenge bargain seekers, it's a prevailing reality in numerous markets. It's important to note that real estate markets vary by region, and seeking advice from the agent regarding the appropriate offer amount is advisable. Additionally, the duration a house has been on the market can impact negotiation. Houses listed for over 30 days could potentially be overpriced, allowing some room for price negotiation

4.  Limit Contingencies

Buyers have the ability to include contingencies in their offers—conditions that must be met prior to finalizing the deal. These may involve a home inspection to assess the need for repairs or an appraisal contingency to ensure the property's value aligns with the price. While contingencies safeguard buyers, they introduce uncertainty for sellers and could lead to deals falling through. Buyers can stand out by including fewer contingencies in their offers, especially those of lesser significance. For instance, waiving a lead-based paint inspection or a contingency requiring the sale of the buyer's own property before proceeding with the deal.

5.  Act Swiftly

Time is of the essence. Some sellers list their properties on a Friday, conduct open houses during the weekend, and review offers by Monday. This condensed timeframe leaves potential buyers with only a few days to view the property, consult with their agents, and submit an offer. Given this urgency, readiness to swiftly make a full-price offer is crucial. If the intent is genuine, being prepared to act promptly is essential in the pursuit of homeownership.