The good news for buyers is that rates are at historic lows. The bad news? Multiple buyers are searching for their dream home, looking to lock in the low rates. So how can you compete in such a competitive market?
Put Your Best Foot Forward
Shopping for a home in a low inventory market is not a process buyers should navigate on their own. So the first step is to have a great real estate agent on your side that has experience with multiple offer situations.
Buyers will need to make sure they have a pre-approval letter and not just a pre-qualification. Being pre-approved by a mortgage lender will always give you more bargaining power. This is paramount in any real estate market, and even more critical in multi-bid situations.
Finally, buyers will want to improve their financial picture as much as possible. Can you borrow from your 401K to offer cash or put more money down? This may be worth considering in such a competitive market.
Learn More What is the Difference Between Pre-Qualification and Pre-Approval for a Mortgage?
Avoid Looking at Houses at the Very Top of Your Budget
In low inventory markets, houses tend to sell over asking price when there are multiple buyers. So if you want to be in the position to make a strong offer, search for homes that are slightly under your budget. If you’re pre-approved for $300,000, look for homes that are listed at $290,000 or lower. Otherwise, it will be hard to win a multi-bid situation if you’re low balling on a higher priced property.
Identify the Seller’s Needs
It’s true that cash is king in most situations, but sometimes there are other factors that will strongly influence the homeowners decision, such as the ability to close quickly or stay in their home for a period of time after closing.
Realize that a high offer from another buyer means nothing if they can’t follow through on it. Sellers need to consider the offers based on how likely they’ll close and when. If you have another attractive offer that’s lower, but still helps the seller reach a particular goal, there may be room for negotiation.
Be Ready to Move
As stated, one of the negotiable terms with the seller can can be the closing date. So with that in mind, start packing and researching your moving options early, so the moving process is as seamless as possible once you’re under contract.
Be sure to consult with an experienced Michigan mortgage lender who can close on your purchase quickly as this can be an attractive term to a seller.
Looking for a Mortgage Lender in Rochester, Michigan?
Do you have questions about the real estate market or looking to get pre-approved?
Julie Krumholz is has been helping Michigan homebuyers for over 35 years and has several loan programs available for various incomes and financial situations. If you are looking for a mortgage lender in Rochester or anywhere throughout Michigan, call Julie from Superior National Bank today at: 586-382-5482 and let her help you navigate through the loan process and answer any questions you may have.
