If so, you’ve likely already browsed online for homes and have noticed how quickly they go from active to pending after being listed. This indicator of a strong seller’s market can make purchasing a home daunting. Buyers need to be prepared for the specifics of our local real estate market, in which inventory is low.
To clarify, a seller’s market is one in which there are more buyers wanting to purchase a home than there are homes for sale. Since the supply of houses is lower than the demand for them, homes may be priced higher and will tend to sell quickly. Sellers are able to ask for higher prices for their homes on the market due to the lack of supply. Buyers will also find themselves competing against other buyers on the same home, sometimes entering into multiple-offer situations.
What’s a buyer in this market supposed to do? First, buyers should research and learn about the realities of the market. One of the most important steps, once you understand the pros and cons of the market you’re in, is to establish a budget and know what you’re comfortable spending. Then, work with a trusted, local lender to get a pre-approval for a comfortable mortgage. There are few situations worse than deciding you want to look at and potentially make an offer on a house, but not being able to do so because you don’t have a pre-approval letter in hand.
Keep in mind that most mortgages are a budget mortgage that consolidates insurance and tax payments into the principal and interest, so be sure to keep those costs in mind as well. Listings include the property taxes, but to know roughly what your homeowner’s policy will cost yearly, you should consult a reliable, local insurance provider.
Many lenders offer homebuyer education courses, usually geared toward first-time homebuyers. If you’re a member, Timberland Regional Library offers free online courses that can teach you how to save money and reach your financial goals. The Washington State Housing Finance Commission also offers education seminars. These resources can be a great way to know exactly what you are going to be facing as a buyer.
A knowledgeable realtor can help with the rest of the elusive details. A good realtor will be familiar with the market and know which lenders, insurance providers, inspectors, and contractors to recommend. Your realtor will also guide and represent you through the purchase process from start to finish while keeping the wants and needs for your perfect home in mind. They will get you in the door of the homes you want to see and help you decide whether a home is worth above the asking price if you are competing against other offers. Keep in mind value is subjective and a home you love may be worth offering more if it means the seller accepts your offer over another.
Your realtor can help you find the balance between the logical choice and your sentimental attachment to a home. In this market, it is likely you will make more than one offer before you start the process of actually purchasing a home. It can be incredibly dissatisfying as a buyer to decide you like a place well enough to make an offer and want to financially commit to purchasing it only to find out your offer got beat out by another buyer’s offer. This can charge the emotions of even the most even-keeled person, so you want to have a devoted broker on your side with whom you’ve built and established a level of trust to avoid this point of frustration.
In review, get a pre-approval from a local lender, be educated about your local market, be patient, and choose a trusted, reliable realtor. Before you know it, you will be on your way to homeownership!