Due to COVID-19, low inventory levels continue in many housing markets across the U.S. Because many sellers have decided to wait to list their home for sale, buyers need to be prepared to jump on new listings if they are serious about buying a home this year. Because interest rates are at all-time lows, now is a great time to buy a house. However, because there are fewer listings in many markets than there would usually be this time of year, buyers need to be prepared for bidding wars. If you ever find yourself faced with competition over a home, here are a few tips that may help you come away as the winner.
Increase your bid.
Although this is the obvious answer, it may be your only option if you find a home that you love. Depending on the situation, you may only need to increase your offer by a few thousand dollars to win the bidding war. Many people are under the misconception that bidding wars always drastically drive up the price of the home. However, people will feel apprehensive about paying the above listing price. If the home is worth it to you, and you can afford it, this may be your best option. Keep in mind that if you wish to pay more than what the home appraises for, that doesn’t necessarily mean the bank can give you a higher loan.
Most people can’t afford to pay cash for a house. However, if you can, that will give you a tremendous advantage over most of the competition. If you are like the majority of the population, which needs financing, be sure that you get preapproved for a loan by a lender. This is typically an easy process that ultimately provides you with a letter to show sellers how much you are qualified to borrow. Be prepared to provide documentation/access to your credit report, income statements, and assets.
Make the first offer.
If the house is priced accurately, a buyer needs to be ready to pay the full price. You can’t wait to submit your offer in a fast-moving market if you are serious about buying a house. Also, as mentioned earlier, be prepared to increase your offer if other offers come in.