Wednesday, April 6, 2011

Competitive Tips for Buyers

Not every market is struggling. The truth is that many desirable neighborhoods and zipcodes are still experiencing healthy inventory levels and conditions that promote multiple offers. As a buyer in these markets, how can you be competitive?

First, and perhaps most importantly, be ready to buy. Readiness is not impulsiveness, however. Before you begin your home search, be clear on your objectives. This means knowing your budget (and how much wiggle room you really have), what amenities are must-haves, and what things you can do without. By having a clear plan of action, you'll know a good deal when you see it and won't hesitate to act. Many would-be buyers miss out on their dream home because of hesitation. They need "the night to think about it" or "to see a few more" before they make a decision. If the home is a good price and in a desirable location, one night could mean missing out on the house altogether.

To take the preparation stage one step further, be absolutely sure you are pre-qualified and pre-approved for a loan. Do this before you even set foot in seller's house. Why? You wouldn't be the first buyer you puts in an offer on their dream home, only to find out financing has fallen through. Lending is tight right now. You may not qualify for as low of an interest rate as you would think. And for others, you may not qualify at all!

And if you were prequalified or approved months ago, be sure to stay in contact with your lender, so that there are no surprises when it comes time to make an offer.

Communication doesn't end there. Keep in contact with your agent about new listings and showings. Homes come on the market all the time, and in hot neighborhoods they don't last long. If you wait even a few days, a home could be scooped up by another eager buyer.

Next, bid competitively. This is where your agent can be invaluable. They have access to your market's stats, which show for how much comparable homes have been selling. This means you may be able to come in a little under list price and still be competitive, or it may mean that the property is already underpriced, and to beat out any other offers, you need to offer more than the asking price.

Competitive doesn't mean handing everything to the seller on a sliver platter, though. Sellers may ask for certain concessions, such closing costs terms, as-is purchases (without an inspection contingency in the offer), and requests regarding closing dates. Some of these requests may seem reasonable to you, but don't be afraid to stand your ground if others are too far-fetched.

And finally, stick to your guns. It can be easy to lose sight of your true end goal, which should be the home you love at a reasonable price. This means that your pre-decided upon budget, well, it must remain your budget. Don't overpay for a house simply because you've gotten caught up in the excitement of a bidding war.

Use these simple tips to help you navigate a tough market. Before you know it you'll be signing on the dotted line for your new dream home.

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