5 Things to Prepare You for Buying a Home This Spring

Spring is here and so is the busiest time of year for buying homes. With current market house inventories at record lows, it may seem like it will be more difficult for you to find your new home. Remember to stay positive throughout the process and do what you can to be prepared and have an edge in your home search. Here are five things you can do to prepare yourself and give you the best opportunity for getting your offer accepted.

Understand the current market conditions - Buying in this market is not easy so be prepared for rejection. Most homes are receiving multiple offers as soon as they hit the market and a lot of these are over the asking price and paying above appraisal. You will be competing against a number of other buyers, most likely some that have the advantage of paying cash. If you currently own a home, confirm with a mortgage banker whether or not your current home needs to be sold before you can purchase a new property. Writing an offer with a home sale contingency is challenging to be accepted and even more challenging if the current home isn't already on the market and ideally has an accepted offer that's through the inspection period and appraisal. Be sure to contact your agent on how to best navigate this process. Just remember not to get discouraged. If you go into this endeavor understanding the market conditions, with some diligence and patience you'll be certain to find a home.
Know your purchase power - Do this by getting a verified pre-approval. Talk to a loan officer who can explain how taxes and the amount you can put down will affect your monthly payment and what you can afford. Be sure to save as much cash as possible. Understand your out of pocket costs in addition to your down payment and closing costs such as inspections, appraisal guarantees, and homeowners insurance premiums.
Don’t make any mortgage mistakes - These could include changing jobs or opening new lines of credit. Don’t buy a new vehicle while trying to buy a house as this could affect your available credit and prevent you from having a mortgage approved. Wait until after everything is approved, signed, and you’re moved in before you think about purchasing all that new furniture otherwise you might be stuck with that new bedroom set and no new house to put it in.
Be prepared to get creative with the offer terms - You might have to get very creative to get your offer chosen. A skilled agent can help you navigate appraisal guarantees, escalation clauses, and more to find just the right path for your offer to be accepted over the others.
Be ready for quick decisions - Things are moving very quickly in today’s market. Currently, the average amount of days a house is on the market is very low and oftentimes homes are only on the market for a few days with showing appointments filling up fast. It’s a good idea to create a list of 'must haves' and a list of 'wants'. With inventory currently limited, you may find additional options focusing on the 'must have' list and potential doing without some of your “wants.” This will potentially give you more options in your home hunt. If you’re currently renting, check with your landlord to see if you have the ability to go month-to-month on the lease once it expires. Many homeowners will need additional time to find a new home after selling theirs and they may request additional occupancy after closing to stay in the property. The more flexible you can be with the move-in date, the stronger the buyer's offer will look. Knowing your options up front will help you be ready for quick decisions and potentially give your offer an edge.