Is your dream house sitting right in the middle of a hot market?
One of the concerns of buyers who are shopping in a competitive real estate market is how to be the buyer that stands out from the rest of the pack – especially if you’re not looking to pay too much over asking price. Instead, make yourself a more attractive homebuyer to sellers, increasing your chance of success regardless of market competition.
Shopping in a competitive market? Make yourself stand out.
Build Your Credit
The better shape your credit is in, the easier it is for you to get the best mortgage rates and agreeable terms, and you’ll need a score of 620 or higher if you’re hoping to secure a conventional loan. It’s crucial to plan well ahead of the time you start looking for a house so you can catch any discrepancies or errors in your credit report that may be impacting your score.
One of the concerns of lenders when it comes to credit is your debt-to-income ratio. How much money do you owe, and how much money can you feasibly pay off? Taking on a mortgage loan can increase your ratio significantly, so lenders are wary of those buyers who already hold too much debt. Start paying off what you owe now before you take on more with a mortgage.
Get A Pre-Approval Letter From A Lender
In the hottest markets, sold signs can go up on the same day a house is listed; you must be prepared with all of the paperwork required to make an offer immediately. Get a mortgage pre-approval letter from your selected lender so that you are ready to show the seller that you have the wherewithal to purchase the property. With a pre-approval letter, you’re likely to get the attention of the buyer over higher bids with no proof of funding.
The right agent will help you present your best case to sellers.
Work With An Agent
In any market, a real estate agent is going to guide you through the buying process, but in a competitive market, you’ll benefit even more from their local knowledge and expertise. You could have inventory quickly coming to the market and leaving just as quickly, so an agent will be ready to jump on the right houses when it’s time, and will help you sort out what you need to be focusing on.
In a hot market, you’re less likely to get a deal, so looking at properties over your budget will only be a heart-breaking waste of time. A Realtor will know how quickly homes are going and how much they are selling for – if everything in a neighborhood is going for over listing price, it doesn’t make sense to make low-ball offers continuously.
Write A Personal Letter
Imagine selling the memory-filled home you grew up in or the property left to you by a favorite relative. For some sellers, emotions come into play when choosing a buyer. Consider writing a personal letter explaining why the house is perfect for you and why you’ll cherish it as much as they did. Include this letter with your offer, so they know you’re serious and you care.
Prepare in advance if you are thinking about buying any home, but especially if you’re shopping in a hot market.