Home shoppers are increasingly facing steep competition for the limited number of homes for sale.
“Attempting to purchase a house in this type of market can make the already complex process of buying a home even more overwhelming,” the National Association of REALTORS® notes in a recent release.
NAR offers up five suggestions for home buyers navigating today’s competitive market:
1. Stick to a budget.
Have buyers get preapproved by one or more lenders to ensure eligibility. Be sure to also take into account extra costs of homeownership, such as taxes, utilities, and insurance. “When listings are scarce, bidding wars can drive up prices, so buyers must be prepared to walk away if the asking price surpasses their budget,” according to NAR.
2. Identify home wants versus needs.
Buyers likely will need to compromise on their wish lists when competition is tight. For example, buyers may have to compromise on amenities like stainless appliances or hardwood flooring, which can always be added later. “However, if a buyer wants to be in a specific school district or have a decent-sized backyard, those cannot be addressed later and must be taken into account during the house hunting process,” according to NAR’s tip sheet for buyers.
3. Be prepared to make decisions quickly.
Homes rarely stay on the market long in a seller’s market. Buyers should not hesitate when they find a house that matches their needs within their budget. Submit offers quickly.
4. Make bids competitive.
A low offer as a starting bid won’t likely work in a seller’s market. Buyers need to be ready to put forward their highest offer from the beginning or they may lose the home. In multiple bidding situations, the highest offer doesn’t always win either. But the bid with the fewest contingencies often becomes the most attractive to sellers. “Removing restrictions related to the sale of a current home and being flexible with things like the move-in date can make a bid stand out to a seller,” NAR notes.
5. Find a REALTOR®.
Buyers may need to be reminded about the importance of working with a real estate professional. Real estate pros are familiar with the areas and neighborhoods in the local areas. “They can give buyers the competitive advantage needed in a tight market,” NAR states.