As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.
If you’re house hunting, you’ve probably spend countless hours online looking up houses for sale in your desired location. My husband and I are currently looking to buy our first house this summer. One thing that I’ve learned while looking at houses is that right now, there are more people looking for homes than there are sellers. I’ve seen houses go up for sale and be sold within 24 hours!
What do you need to know before buying a home in a seller’s market? I talked to Catherine Brown from Rocket Homes to get insight on what to avoid.
Getting preapproved through a mortgage lender should be the first thing you do, especially in a seller’s market. Not only does this tell you and your agent how much you can afford, it also tells the seller that a lender backs your offer – having an up-to-date preapproval letter ready when looking for a house can make a huge difference when making an offer. It’s important to keep in mind that your preapproval letter is generally valid for up to 90 days.
Not Using a Real Estate Agent
Working with an experienced real estate agent can save you tons of time in the long run, and will assure that you have your best offer available at all times.
Brown explains that sellers who use an inexperienced agent might price their home way above market value. As a buyer, you want to make sure you have an experienced agent checking comparable prices for the homes you’re interested in. This can help stop appraisal problems in the future.
Giving a Low Offer
You know those TV shows where the buyer gives an offer way below asking price and still gets the house? A seller’s market means it might not be the time to try this method out. Chances are that house you want could have multiple offers already on the table, meaning it’s best to stay away from making a low offer.
“With a seller’s market, you’ll see limited inventory and a lot of competition for the really nice homes. Therefore, it’s very important to submit your highest and best offer when you see something that you love. It’s equally important to submit that offer ASAP,” says Brown.
If the house is already above your budget, or is too close to your budget limit, it might be best to move on to looking at more houses.
Waiting to Make an Offer
“Submit your offer ASAP. If at all possible, don’t ask for seller concession. Unless the seller has included appliances in their listing, don’t ask for them in your offer,” says Brown.
Making a low offer is one mistake, but waiting to put your offer in is an even bigger mistake. Like I mentioned before, I have seen houses sell within 24 hours, so waiting to put an offer in could make it even harder for you to get the house of your dreams.
Don’t ask the seller to include appliances or make other concessions unless you absolutely need to. This might deter them away from your offer if they didn’t plan on selling the house the way you’re asking for. With a lot of prospective buyers in market, you want to make your offer the most attractive and easiest!
With prime house hunting season beginning, it’s time to start thinking about beginning the process. If you’re ready to get preapproved, make sure to take advantage of Rocket Mortgage or talk to a Quicken Loans Home Loan Expert today.
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