Hello! It's been quite a while since I've updated this blog. I thought it (and I) needed some time off in the summer. And since summer seems to last longer than ever now, that's extended to today.
4 Tips for Buyers in this Historically Hot Market
Dated: April 29 2021
It’s tough out there for buyers. Multiple offers to compete with, homes selling as soon as they hit the market, and not enough homes hitting the market. It can be frustrating and dispiriting. But there are some things buyers can do to manage this market and give themselves the best chance to land a house:
Don’t get pre-approved, full underwriting pre-approval.
Everyone has a preapproval. In fact, it’s essential if you’re planning to finance a home purchase in Dane County. Some lenders now, though, are offering the even more robust fully underwritten pre-approval. This pre-approval has already gone through the underwriting process before you’ve even gotten an accepted offer on a home. This gives sellers assurance that your financing is solid. And gives you the buyer confidence in that financing, letting you compete strongly for properties. One option is Guaranteed Rate’s Red Arrow Approval Express, but there are certainly others out there.
Search below the top of your budget.
When buyers get their pre-approval from their lender, they often want to search for properties right at their pre-approval amount. You’re pre-approved for $250K, so you start looking at properties listed at $250K. And in the past, that was okay. There was a decent chance a home would sell for below list price. But in the current market, it’s not only nearly impossible to get a below list priced offer accepted, it’s likely that you’ll have to offer significantly over list price to land the property. So leave yourself some space to do that. If you’re pre-approved for $250K, consider looking at properties priced at $225K or below. This will give you space to go above the list price, while still staying in your pre-approved purchase range.
Broaden your search. We all have preferences--Dutch colonials, updated kitchen, that perfect neighborhood. And that’s fine! But it’s useful to remember that the more strict we are with our preferences, the more limited our options will be. So keep your search as broad as you can. Look outside your preferred neighborhoods or even town. Consider the outdated kitchen an opportunity for you to create the space you want. Look at a ranch or two, rather than just Dutch colonials. All of these things can make it more likely that you will find a house. And try and remember that home’s are created by living in them, not by what features they do or don’t have.
Be patient. Buying in an intense sellers market can be a frustrating experience. It can take months and multiple rejected offers to finally land that house. And while patience won’t alleviate those challenges, it can help you personally stay positive and manage the process.
In November of 2000, I closed on my first house, a rough-around-the-edges 1922 colonial with lots of sun, not a lot of storage, and an enormous oak tree in its postage stamp-sized back yard. From the ....
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