Buying Your Next Home? Check Out These Tips!
Congratulations! You're beginning the exciting (and sometimes frustrating) process of buying a home. Most home buyers find themselves asking "where do I start?" In this blog, I'll provide you with a few tips that will help you secure your dream home in this challenging market and get the most out of your homebuying experience.
"Where Do I Start?"
This is one of the most common questions I get from homebuyers. The very first step would be to compile a rough list of what you're looking for in a home. This would include figuring out what your ideal budget is, how many bedrooms, how many bathrooms, what area do you want to live in, etc. You've probably already thought about your dream home if you're reading this article, but if not, our Lifestyle Planning Guide is a helpful resource for completing this initial step. So what's next?
In Massachusetts and Rhode Island, a serious homebuyer must be prepared to be competitive in today's housing market. Most towns are experiencing a severe lack of housing inventory which means that buyers are often competing against each other when trying to purchase a home. Naturally, if a seller is reviewing multiple offers, they'll be less likely to accept an offer that has major obstacles to overcome.
Having your own buyer's agent (which costs a buyer nothing) will greatly increase your chances of successfully negotiating a multiple offer situation to secure your next home. I'll discuss the benefits of having your own buyer's agent in my next blog. For now, let's take a look at two common obstacles that may cause a buyer to have their offer rejected by a seller and discuss what you can do to help prevent this from happening to you.
Get A Pre-Approval Letter Prior To Viewing Homes In Person
If you're financing, as most homebuyers are, one of the best ways to set yourself up for success is to get a pre-approval letter from a mortgage lender prior to viewing homes in person. Amidst the pandemic, in an effort to limit virus exposure by weeding out "tire-kickers", some sellers won't even allow potential buyers to visit their home unless they've been pre-approved. Additionally, seller's agents often require that all offers include a pre-approval letter in order for the seller to even consider the offer. With many homes only staying on the market for a few days, there usually isn't enough time to get a pre-approval letter, and submit an offer, if you weren't pre-approved prior to viewing the property. I can't stress enough that completing this step ahead of time is crucial to purchasing your next home. The pre-approval letter also provides you with helpful information, including what financing program you're approved for, your interest rate, what your maximum homebuying power is, what your monthly payments will be, and how much money you'll need to pay out of your own pocket at closing. Click Pre-Approval Letter to view a sample copy to get a better understanding of what information is included.
Selling Your Current House?
A buyer that needs to sell their current home in order to purchase their next home is in a tricky position in the current market. Sellers typically view the uncertainty of a homebuyer having to sell their own home as a big risk. They're thinking "will they be able to sell their home and still close in the timeframe that I need?", "what if their buyer falls through?", "what if they can't sell their house?" In a situation where several buyers are competing for the same property, it's critical to reassure a seller that you're a serious buyer and that you're working hard to sell your home. In a perfect world, the best way to accomplish this is if you already have a buyer that's contractually bound to purchase your property. Let's face it, we all know that we don't live in a perfect world, so what is another option?
At a minimum, a seller will want to know that you've already listed your home for sale and that you're actively marketing it to buyers. Many offers are declined, or not reviewed at all, when a seller learns that the buyer hasn't listed their own home for sale yet. As a buyer, it's a great tactic to be able to show the seller that you've listed your home, you're actively marketing it via open houses, private showings, etc., and that it's priced appropriately to sell quickly based on nearby comparable properties that have recently sold. It is especially beneficial to have your own agent negotiate and present this information for you in a situation like this.
Some buyers are understandable reluctant to list their home for sale in fear of not finding a new home in time. Remember, just because your home is listed for sale, it doesn't mean that you'll be forced to sell it and be kicked out on the streets if you don't find a new home. Contingencies can be put in place that allow you to secure a buyer under the condition that you find suitable housing for yourself as well.
For more information on the homebuying process visit my Buyers Guide.
Trusted Real Estate Advisor
Berkshire Hathaway HomeServices
Commonwealth Real Estate
Cell: (508) 463 – 7036
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