Tips for Buying in a Tight Market
Just as summer temperatures heat up in sections of the country, home sales in pockets of the nation are sizzling, too. That's great news for sellers, but is enough to make a potential buyer's stomach churn watching prices mount on a monthly basis.
So, if you are a buyer, it's more important than ever to be prepared and be ready to make an offer at a moment's notice.
That's especially crucial in a market like Arlington, where entry- and move-up homes are receiving multiple offers.
"Strong demand and low supply have been in effect for the last three years," said associate broker Casey O'Neal. "So far this year it has been typical to see more buyers looking than (there are) homes for sale. In the third quarter so far, inventory is still low and demand is strong."
California is also experiencing a dwindling inventory of homes and soaring prices.
"Just when I thought inventory could not get any lower, and prices any higher, it happens again," said Realtor Peter Tichinin, of Chico, located 90 miles north of Sacramento. "The seven-year average of homes on the market in July is 308. As of July 9, there were 130 homes on the market."
Across the country in Jacksonville, Fla., similar conditions exist.
"June 2002 was the craziest month ever in real estate in Jacksonville," said broker Dana Hancock. "Resales were selling in record time and getting top dollar. The title companies, lenders and most of us Realtors had our best month ever. Our market here in Jacksonville is still very healthy despite what we're hearing about the rest of the country."
So what's a buyer to do? For starters, you should:
- Research and determine what you want beforehand - how many bedrooms, approximate square footage, preferred eighborhoods, and how much you can afford to spend.
- Make sure your credit report is accurate. There would be nothing worse than finding the perfect house and missing your chance to make an offer because there's an error on your credit history that places you in an unfavorable light with a lender.
- Get pre-qualified for a mortgage before you begin looking at homes. Not only will this give you an exact price range for your purchase, but pre-qualification will add muscle to your offer.
- Stay in close contact with your agent and clearly express your needs. This is especially important if you're in a market where inventory is low. You'll want to be notified as soon as a home that fits your criteria goes on the market. A good agent in a tight market stays on top of the listings on a daily basis and calls you the minute a good match shows up, especially in communities where homes are listed and pending sale in the same week, or even same day.
- Use the Internet to scout out new listings on the Metro Listing Service.
- Keep in mind that there's no such thing as the "perfect" home especially if you're in a market where prices have been consistently rising. Instead, set priorities. Determine what you're willing to sacrifice.
- Bid competitively. Keep in mind you'll likely be competing against other offers. Now's not the time to play games and how low the seller will go.
- Forget about making a contingent offer. When multiple offers are flying, a contingent offer - one that is based upon you selling your house first - will wind up in last place. Sell your house first, have your down payment in hand, and be ready to rent or live with family or friends temporarily.
- Get a professional inspection before you buy the home and sign the final mortgage loan papers. Otherwise you'll be left in the dark about any hidden defects in the property.
- Most importantly, if you're determined that now is the time to buy, don't be timid. You'll need to be ready to act on a moment's notice and present an attractive offer as soon as you see that close-to-perfect home that hits the market.