5 Tips for Buying a Home in a Crowded Market

Published on: May 21, 2021fb-roundtwitter-roundemail-round
People lining up at an open house Spencer Gabor

The Story 

Home-buying is a pandemic trend you can probably count on for a while. And it’s a buyer-eat-buyer world.

Come again?

People are facing stiff competition when shopping for a home. Demand is high with a massive WFH movement freeing a lot of Americans to move away from the office. Plus, homes are in short supply. Earlier this year, housing inventory tanked by nearly 30% year-over-year to a record low.

How can I compete? 

If you’re hoping to say “yes” to a new address, here are a few ways you can set yourself apart. 

  • Show them the money. In a competitive market, making an offer above the asking price isn’t uncommon. Just don't go too high, if you need a mortgage. Lenders only give you as much as an appraisal says the home is worth, so you're on the hook in cash for anything more than that. A big down payment (20% is often recommended) could make you a more attractive buyer, too.

  • Get pre-approved for a mortgage. By filling out an application ahead of time, you can make sure lenders know you’re responsible with your money (and will be with theirs, too). Getting pre-approved also lets you know how much home you can afford and tells sellers you're a serious buyer. 

  • Call in a pro. Working with a real estate agent could make the road from “house hunter” to “homeowner” a lot smoother. Not only will they be able to help you find a home that meets your needs, but they help you prepare a more competitive offer and successfully negotiate with a seller. 

  • Be flexible. Maybe that’s letting the sellers pick the closing date or stay an extra month or two, rent-free. Or maybe it's letting go of some “must-haves.” Buyers can't be choosers in a hot market.

Anything else I can do to stand out?

For brownie points, try writing a letter. It's one way to communicate directly with the seller and let them know why you’re the best person to move into their home. You can also use it as an opportunity to tell them more about your employment and financial situation, helping them feel more comfortable trusting you to live up to your end of the deal. But be careful not to overshare. Revealing certain info like your race, religion, or family status could open up the sale to discrimination issues.

theSkimm

Buying a home in a competitive market can feel like a long process. But with the right team and money strategy, you’ll be saying “home sweet home” in no time. 

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Skimm'd by: Ivana Pino, Stacy Rapacon, Casey Bond, and Elyse Steinhaus