Do you think you’re ready to purchase a home? In this post, we cover your next steps that will bring you closer to homeownership.
House hunting can be a tough process. We often discuss ways to manage housing prices, interest rates, supply, and mortgage needs, but something that’s not covered as often is being the standout buyer. While we’re no longer in the firm seller’s market we were one year ago, it’s still important to make yourself, and your offer, prominent. If a seller has multiple offers, there has to be something about you that makes them think you are the best path forward. No matter what the market trends are, the importance of making a strong offer and good impression never wavers. Here are some tips for house hunters looking to win over sellers once they find the perfect house to call home.
Make sure you’re pre-approved
Technically, buyers don’t have to be pre-approved before they go house hunting, but it’s a step we strongly recommend not passing over. A pre-approval can give a seller so much assurance and faith in you as a buyer, which are two things sellers want to feel before they accept an offer. Your pre-approval shows that you are organized and committed to the purchase of the home, and it means you already have a strong idea of what you can afford. This means there’s a lower chance of you backing out as a buyer, or realizing after you put in an offer that it’s not in your budget. Financing is a common reason why deals fall through. Pre-approvals tell a seller you are actively working with lenders to make homeownership a reality, which is a big comfort.
Submit a simple offer
Nobody likes complicated contracts and offers with dozens of conditions and dependencies, not just in real estate, but everywhere. When you’re submitting your offer on a home, it helps to keep it as simple and neat as possible. A straightforward and easy offer is appealing to sellers. For example, it’s best to avoid an offer that is dependent on the sale of your current home, or asking for additional things in your offer like pieces of furniture or financial contributions in some way.
However, when you’re house hunting there are two conditions we recommend keeping in an offer. These are a home inspection, and an appraisal report. It’s smart to require the home to pass an inspection, so you don’t end up taking possession of a property with thousands of dollars of repairs needed. An appraisal also protects you by making sure you can secure the necessary financing by proving the home is worth the amount of your offer. Since lenders won’t finance more than the value of a property, you need to make sure your offer falls into their range.
Save for a bigger down payment
You want to prove to sellers that you have a solid financial profile. By submitting a bigger down payment, this shows you have been saving up for a while and you have the funds to cover more of the sale right away. This might mean spending some extra time saving for a 20 per cent down payment, as opposed to five or 10 per cent. While it will take more time and perhaps push your entry into the market back, it also means you may have better luck when house hunting. You want sellers to know you’re serious about the purchase at the end of the day.
Going along with the idea that sellers are looking for a buyer who will make their experience easier, being as flexible as you can with your offer can go a long way. Often, sellers plan on using the sale of their current home to support the purchase of their next home, if they’re buying again. This means ideally, they would like to sell their home before taking over the new home, so they can access that equity and not have to apply for bridge financing loans to cover the purchase.
On the other hand, sometimes sellers don’t have their next residence set in stone yet, and don’t want to move out before they know where they’re headed. If you are flexible with dates, times, and overall closing operations, this can help persuade sellers to accept your offer. By providing them with an easy, stress-free way to leave their current home and move on, they may value that opportunity in you. So if you’re ready to close now, or can wait a few months, this might be appealing.
Use a real estate agent
Finally, a real estate agent is essential when you’re house hunting, for multiple reasons. For one, sellers are highly unlikely to want to work with buyers trying to navigate the market without an agent. They want to know the buyer has a professional on their side to move the process along and avoid any difficulties. Your offer may be great, but if you’re alone in it, sellers are much more likely to pass. Plus, agents are important to help you navigate your offer. Often, we hear recommendations of making an offer above asking to appeal to sellers, but in a changing market where sellers have less control, this might not always be the case. Agents can help you find the right offer so you’re not spending more money than you need to.
House hunting is exciting, and when you find the home you love, it’s easy to want to jump right in and submit your offer. However, it’s very important to create the best image of yourself and your finances, and submit an offer that appeals to the seller’s needs. Take the time to save up your down payment, chat with your agent, and get your pre-approval. It will be worth the effort in the long run!
If you have questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.