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9 tips for buyers in a hot seller's market

Friday, September 2, 2022   /   by Laura Larson

9 tips for buyers in a hot seller's market

Home buyers have more options for where to live thanks to nearly record-low mortgage rates and the opportunity to work remotely. But right now, across all price categories, homes are selling at their fastest rate overall. Here are nine suggestions for purchasers trying to find their ideal residence.

Verify the quality of your credit score. 
Over the course of a mortgage, a higher credit score can result in savings of tens of thousands of dollars. Before beginning the pre-approval procedure, have a strategy in place to improve your credit score if necessary. You might find that delaying your purchase till your score rises is beneficial for you.

Compare mortgage offers. 
This can result in a monthly cost difference of several hundred dollars. Ask questions regarding the interest rate, the amount of the down payment, and the anticipated closing expenses, among other things, to multiple lenders to make sure you receive the best deal. 

Obtain pre-approval to enable quick movement.
Pre-qualification, which is advantageous for buyers still figuring out what they can afford, differs from pre-approval in that the latter signifies your permission for full financing and calls for a more thorough financial and credit check.

Now deposit any gifts or loans into your bank account.
According to a consumer poll from 2020, 52% of first-time homebuyers and 40% of those with mortgages accept loans or presents from family or friends to help with the down payment. Your pre-qualification takes ready access to that money into the account.

Include closing costs in your spending plan.
In addition to the down payment, you may also have to pay taxes, appraisal costs, and homeowner's insurance. In particular, if your offer was at — or over — your budget, preparing for them might reduce stress following your house purchase.

Prepare a list of the sacrifices you're prepared to make.
It's wise to create a list of priorities and house features you can live without before entering a potential bidding battle so that you stay within your budget.

Use virtual tours to quickly narrow down your options.
Homes can be under contract in a hot sellers' market in around two weeks. Additionally, 12% of purchasers claiming they would be willing to buy a house without having seen it. Utilize virtual or 3D home tours to sample properties and, when available, use self-tour alternatives to get an advantage over other buyers in terms of speed.

Think about including an escalation clause in your offer.
This clause in your pre-approval letter guarantees that the seller will always see your best offer. The drawback of an escalation clause is that you can find yourself paying more than you expected. Look for properties below your upper price limit to stay within your budget.

Work with an agent with extensive local market knowledge.
Finding a trusted guide and counselor can be crucial in a competitive environment. An expert local agent can help you understand what makes a winning offer in your area.