Low Housing Inventory: Buying a Home in a Tight Market

Are you searching for a dream home? The time is now to buy, because you don’t want to lose your possible dream home to another prospective buyer. In the market that is cut-throat – this will increase your chances of possibly receiving your next home in San Diego.

Listed below are seven different tips in helping you buy a home when the inventory isn’t as high as it should be according to an article in Hankbailey.realtytimes.com:

Mortgage Prequalification: With this, you be able to make a strong assurance to purchasing and making a more appealing offer to the seller. The lender should be a reputable source. That being said, many lenders aren’t all the same.

“A good example, I had a first time home buyer contact me yesterday,” Bailey said. “She called a local lender and gone online to their website to get ‘pre-qualified,’ and was quickly emailed a glowing prequalification letter saying she was pre-qualified to buy up to $150,000. I also sent her my lender, that I refer all my buyer clients and customers to and he called me a few hours later to tell me that he was not comfortable sending a pre-qualification letter based on $120K much less $150K!”

The issue was the income that was unverifiable. The lender that Bailey refereed to the customer asked her the questions that were right and the figures were verifiable which made a stronger pre-qualification letter than the other lender she searched for. For the lender Bailey referred, made the customer bring her taxes and other income documents to verify and take care of red flags.

The realtor referral has the better chances to receive a better loan.

Keep in Contact With your Real Estate Agent for Listings: Your loan agents should be reaching out to you about trends, listings and price changes. Instead of using databases like Zillow and Trulia, your real estate agent could find homes that you are attracted to quicker with a third party source.

Do Your Research: Although you should look for your home through a real estate agent, just to get an idea of what you’re looking for Trulia, Zillow and Realtor.com are good tools to use. Also driving through a neighborhood that has new construction is a way to get an idea of what you’re getting into. If you find what you’re looking for, let your real agent the address to figure out more of the details.

By scouring the neighborhood, it may get you ha head start before it is even listed.

Be prepared to bid competitively: Don’t start of with the highest price, but look at the highest price you could afford in order to get a deal. You can’t drag your feet with a low inventory market like now or else you won’t find what you’re looking for.

“I have seen prices on new homes increase about eight percent every six months for the past two years and they keep selling them as ‘pre-sales,’ before the ground is cleared so they don’t expect they will take less than ask.” Bailey said. “On resales, I am seeing the average sales to list price at about 95 percent. Offering 80 percent of the list price won’t get you anything but an offended seller who might not want to work with you.”

Withhold possibilities to a minimum: Limitations like needing to sell your real estate before you move or obtaining a stretched inspection or due diligence could make an offer unattractive. You could probably sell your home rapidly in a market that has a low housing inventory, but you have to get your house on the market so it could be shown and under contract before taking serious offers elsewhere.

Buying Frenzy could be detrimental: Just because you are competing with another prospective buyer, that doesn’t mean you should buy it as well. You don’t want to bid at eight percent because of emotionally charged competition. You lose leverage with negotiations with multiple buyers if there is too much emotion. Without paying the premium of a multiple offer bid, there will always be another home.

“Recently I had to go back to some buyers I have been working with since August.” Bailey said. “They had felt the wanted to be in a certain price range. I expressed to them that while they were looking for that perfect home, prices had gone up 19.8 percent in the Metro Atlanta area and mortgage rates had gone up about 150 basis points to today at about 4.5 to 4.625 percent.”

“With rates proje3cted to be up another half to full point in the next six months, and prices up again another four0-five percent, now is the best time to zoom in just what you need and make that purchase.”

There’s no better time than now to buy real estate!

 

By Linda Moore

 

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