The economy has been hit hard by the Covid-19 crisis, but one part of the economy that is still doing well is residential real estate.
The strength has been fueled by buyer demand, low mortgage rates and small housing inventories. With large numbers of homebuyers coming off the sidelines, it is an extremely competitive environment. As a result, buyers have to be prepared to move quickly or be left out in the cold.
Here are seven ways that you can increase your chances for success:
- Speed counts. Well-maintained homes that have been priced right can sell in the first two weeks on the market. If you really like a property, make sure you have an offer immediately. The listing agent/homeowner may not wait long, especially if there are other interested buyers.
- Pick an experienced agent. Hire someone you trust who has a proven track record. When buying a home, you want an agent who is proactive and available anytime. Find someone who will actively work to find off-market listings. A top agent usually has an extensive network of broker contacts who will share information on homes that are “coming” to the market very soon. This enables you to get a head start on other prospective sellers or buyers.
- Be prepared. Decide how much you are willing to spend. Find a good home inspector before you start looking at homes. Someone who will conduct an inspection on short notice. This can accelerate a fast closing. Consider conducting a pre-offer inspection so that you can write a clean offer without an inspection contingency.
- Get pre-approved. Make sure you have a lender go over your finances so that you know whether you are eligible for a loan. It’s an easy process.You can usually submit an application online or on the phone. Once you have a pre-approval, you can move rapidly when you want to make an offer on a home that you really desire.
- Expect competition. The market is very competitive, and the amount of homes for sale is limited. Multiple offers are becoming more common as the uncertainty surrounding Covid-19 eases more. More buyers have decided that it is safe to leave their homes to begin or resume their searches. Ask your agent how an escalation clause works, and be prepared to employ it in competition.
- Prepare your down payment. The more money you can put down, the better. This signifies to a seller that you are a serious buyer. It puts you in a strong bargaining position. That being said, you don’t want to overextend yourself by liquidating all of your savings or investments to make a larger offer. You want to have money set aside to move into the home and pay for unanticipated repair or upgrade costs after you move in.
- Patience pays off. Homes that have been poorly performing on the market can present buying opportunities. Sellers are more likely to negotiate on price, especially if they’ve already bought another house and are paying two mortgages. Additionally, you will potentially have more options if you don’t rush into a purchase. Many sellers pulled their homes off the market when the pandemic precipitated strict stay-at-home orders. A number of sellers will likely re-list their properties as time goes on.