As a buyer, being able to lock in a low mortgage rate is ideal. As the Federal Reserve takes a cautious stance with interest rates, it’s safe to assume that the current low rates will not change any time soon. However, receiving a low mortgage rate is only the first step in the home buying process. With demand heavily outweighing supply, competition with other buyers will test your savviness. Here are a few suggestions that can help you make the best offer in the current housing market.
Check new listings frequently
Being able to catch a house as soon as it hits the market and submitting a solid offer immediately could be the difference between winning and losing your bid. To accomplish this, the first step that is required is having lending documents ready to make the offer.
Use regional lenders
Local lenders appreciate the new business and will be proactive in terms of expediting loans. National lenders tend to be more procedural and lack the same degree of customer service as local lenders. With a good local lender, you can reach the closing process within a few weeks. Just make sure that you have items like mortgage pre-qualification and employment history on hand to ensure the process remains seamless.
Find properties that have been listed for months
When a home has been on the market for 90 days or longer it presents a higher probability that you can successfully win a bid below market price. There will likely be issues with the home if it’s been on the market for a long time, but you can use this as leverage against the homeowner who’s desperate to sell.
Search for homes listed as “under market”
Finding homes that advertise being under market value may require more analysis, but there will be sellers that list their homes low. The most important aspect to remember is to bid the best price you can, even if that requires you to go tens of thousands higher than the list price. With an increasing number of buyers in the market, others are bound to bid the list price or slightly higher for homes that are listed under market value.
Obtain an appraisal contingency
The benefit of an appraisal contingency is that you will gain some leverage after the offer is made to possibly reduce the price closer to the appraised value of the home. Pair this with a home inspection and your final negotiation of the price could give you the best offer in the current housing market.