10 Things To Do When You’re a Buyer in a Low Inventory Market
First time home buyer? New to the Omaha area? If so, please click here, or go to the page “Steps to Buying a Home in Omaha” found in the menu bar on the top of this page for detailed information on the home buying process.
1. Find an Agent… That You Like.
If you’ve decided it’s time to venture into home ownership for the first time, or you’re leaving one home for another, an important thing to do is find an agent to help guide your search – and make sure you genuinely like them. Buying a home is a big transaction, and therefore a big deal, so you want to make sure the individual representing you is someone you trust and will enjoy working with. It will save you time and additional stress at the very least.
2. Be Prepared.
This could mean a lot of different things depending on your situation, but most important is to be prepared financially. If you’re unsure what this might look like, talk to a financial advisor about tools to help you save for a down payment. Beyond that, when you’re finally ready to begin the home search, be sure to get a pre-approval letter from the lender of your choice as early as possible. This will show sellers you are serious about your intentions and also save you time once you’ve decided to submit an offer, bettering your chances of getting the home you desire.
3. Don’t Let Emotions Get The Best of You.
Keeping your head on straight is key for a smooth and successful home buying experience. This is not to say that buying a home in and of itself is not emotional – but by keeping your feet on the ground and reality in check, you will save yourself from buying a property you really don’t want. You may see a house and fall head-over-heels for the look of it, location, or any other amenity, however, there is much more to it than that. Things like sound structure, and homes working in good and proper condition are just as important as the beautiful master suite.
In such a tight market, it may be enticing to remove contingencies from your offer to remain competitive, however, relating back to tip #3, is it worth winning the bid now, for a mountain of problems and repairs later? No home is perfect, and inspections’ requiring some extent of repairs to be made is almost always the case. This is also where your agent will come in. If you want to write an offer on a property, consult your agent. They are experts in writing contracts and knowing what will be best for you – which is why it’s important you trust them!
5. Incentives for Sellers.
In terms of writing an offer, the trick is to be competitive without selling yourself short. If you’re in the position where you can offer cash that will always be attractive and preferable to the seller. If you’re not in that position, however, there are other ways to incentivize your seller – talk to your agent for situation-specific advice. Be careful though, contingencies are meant to protect you and it’s important to not get careless with competition.
6. Showing Good Faith.
With knowledge of a competitive market, once you find a home you feel strongly about, it may be wise to be generous with the amount of your earnest deposit. This will show good faith to the seller that you are a serious buyer. Again, there is a range of acceptable numbers for every price range, but consulting with your agent will help you find a number you’re comfortable including in your offer.
7. Push Up Closing Dates.
Remember those incentives we were talking about? Here’s one. “The sooner, the better” is usually the scenario sellers are looking for. Now, I understand this is often dependent on financing, which is why on top of an agent you like and trust, it’s crucial you feel the same about your banker. Constant communication with everyone involved will increase your chances of a smooth transaction.
8. Escalation Clauses – Caveat Emptor.
An escalation clause is an agreement by the buyer to pay a certain dollar amount (or percentage) over the highest bid the seller may receive. This is where the caveat emptor (or buyer beware) comes in – while these clauses are highly competitive they have the potential to be a legal nightmare. It is often assumed when dealing with these clauses that buyers independently seek legal advice on the matter. Overall, there are ways to make an offer competitive without such high risk attached.
9. Be Patient!
Buying a home can be stressful, but it can also be one of the most rewarding experiences of your lifetime. If you’re in a position where you can focus on the journey instead of the destination – do so!
10. Act Quickly.
Being patient is not the same as being lazy. If you find a home that tugs at your heart, do not wait! Work with your agent to put together an offer as soon as possible. And since you’ll be prepared, and will already have your pre-approval letter in hand (wink), you’ll be able to cut right to the chase and concentrate on the best offer to submit.
That said, try not to let the speed and pressure of the current market push you into making an offer on a property you’re not crazy about. If you are in a situation where timelines are not at your discretion, be sure to find a home with good bones. Aesthetics can always be changed…but we’ll leave the fixer upper tips for another post. 🙂