Written by:
Jeff Caldwell – Branch Manager Overland Park – (913) 498-3333
While higher rates have kept some people on the sidelines when shopping for a home, the housing market still seems to be going strong. Home prices are not going to drop anytime soon, and with a lack of inventory and rates high, now still might be the best time to buy.
With the market more competitive than ever, we know that buying can seem like a stressful situation. Navigating this market can be challenging, but you can secure the home of your dreams with the right strategies and working with a trusted lender and real estate agent. Here are five effective ways to stand out in today’s competitive housing market.
1. Get Pre-Approved for a Mortgage
Before you start house hunting, one of the most critical things to do is get pre-approved for a mortgage. Many people will use the terms pre-qualified and pre-approved interchangeably, but there is a difference. A pre-approval represents the highest level of approval that a lender can issue. During this process, the lender thoroughly verifies the information provided on the loan application. This includes confirming the availability of assets with the bank, reviewing the applicant’s credit history, and assessing their employment history to ensure everything is in order for the closing. If you are not properly pre-approved, your loan can fall through when it comes time to purchase.
Getting pre-approved is critical as it shows sellers that you are a serious and qualified buyer. This is what Homestead does for its borrowers. Reputation matters in this business, so who you choose as a lender can hold major weight when it comes to the potential sellers. Homestead Financial Mortgage has 25 years of experience under our belt, and our reviews show how great of a partner we are.
2. Work with an Experienced Real Estate Agent & Lender
Winning the contract on a house is no longer just a matter of making the highest offer. Working with an experienced real estate agent and a good lender is invaluable in a competitive market. They have extensive knowledge of the local market, can provide insights on pricing trends, and may have access to listings before they hit the market.
A skilled agent can guide you through the bidding process, understand the numbers, get your offer accepted quickly, and ensure a smooth transaction. A good lender will be able to sit down with you and work through what you personally qualify for and see how to best approach offers with your real estate agent. Whether that is by offering more down on the home or working to secure a lower rate, when you couple a good real estate agent with a lender, they can look at the numbers and help both the seller and the buyer find the best transaction. This is an easy way to set yourself up for even greater success.
3. Be Flexible and Act Quickly
In a competitive market, homes can go under contract within days or even hours. Being flexible and ready to act quickly is essential. This means being available for showings on short notice and being prepared to make an offer as soon as you find the right home. Another reason why being pre-approved first is important.
It’s important to work with a real estate agent who is available when you are and is on top of their communication. It’s also important to work with a lender that does the same. At Homestead Financial Mortgage, our Loan Advisors are available on nights, weekends, and even on holidays if you need them. We can help you get a loan the way you are most comfortable – whether that means working with you via text, email, or over the phone. Plus, our application can all be done on your phone from the comfort of your couch, and we can get you pre-approved in less than 24 hours! In today’s market, that is critical. You will not be limited to 9-5, Monday through Friday customer service hours with us. No bankers’ hours here!
4. Make a Strong, Competitive Offer
You need to make a strong, competitive offer to stand out in a competitive market. This doesn’t always mean offering the highest price but instead presenting an offer that is appealing to the seller.
The strongest offer might include a larger earnest money deposit, flexibility with the closing date, or waiving certain contingencies such as appraisals and inspections if you are comfortable with them. Additionally, Loan Advisors at Homestead will work with your agent and the listing agent to help them understand the offer being presented to them and why they should consider this borrower.
5. Consider Alternative Financing Options
Exploring alternative financing options can give you an edge in a competitive market. For instance, if you have significant savings, consider making a larger down payment to strengthen your offer.
You might also explore the possibility of a cash purchase if you have the means. Cash offers are often more attractive to sellers due to their certainty and speed of closing. You can do this with a strategy called delayed financing, where you use cash to purchase the home outright and then immediately refinance using special underwriting rules. Sometimes, you can use money from investment accounts or gifts from a family member to make this happen.
If you trying to buy and sell simultaneously, an option to consider is a recast loan. A mortgage recast helps buyers purchase a new home BEFORE selling their current home. This strategy allows buyers who are looking to purchase in a competitive market to balance the stress and urgency of finding a new home.
As mortgage lenders, we understand the challenges of buying a home in a competitive market and the stress it can bring. Our expertise and commitment to your financial success means we can provide tailored solutions to help you stand out. From securing a pre-approval to helping you secure competitive rates and personalized loan options, we are here to support you every step of the way. With our dedicated team and comprehensive services, you can confidently navigate the complexities of the home-buying process, ensuring you get the keys to your dream home without unnecessary stress.