You’ve probably heard about how we are still in a relatively strong “seller’s market.” This is defined not just as a market in which demand for homes is greater than the current supply, but more specifically as a cycle in which the “absorption rate” of homes on the market (the time it would take for today’s total inventory of homes to sell) is less than 5 months.
But that doesn’t necessarily need to be a concern for those of you looking to buy. Rates are near historic lows, so from that perspective, the current climate is great. You’ll be able to afford more than you might if rates were higher. Plus, since there are fewer buyers looking in the winter months, you have less competition if you do find that perfect house.
How to put yourself in the best position to get your offer accepted…
But regardless of when you’re looking — either now or a few months down the road — the best advice I can give you is to first make sure to get pre-approved (not just pre-qualified) for a mortgage. That is one of the best ways to ensure you’ll be in an advantageous position when you’re ready to submit an offer on your dream home.
After all, when sellers receive multiple offers (which is very common these days), they look at more than just the amount of money being offered. They also look at whether there are any contingencies, the buyer’s desired timing for settlement/move-in, and whether a buyer is already pre-approved (and the strength and reputation of their lender). If you aren’t pre-approved, a seller won’t give your offer much, if any, thought, because they have no way of knowing if you’ll even be able to get a loan. They will invariably move on to the next offer.
Other benefits of pre-approval
Pre-approval benefits you in another way, too. You’ll know exactly how much you can afford, so you and your Realtor® can focus on the best homes within your price range…and be ready to submit a competitive offer that will get consideration.
So, if you’re thinking of beginning your home search soon, now’s the time to reach out to a couple lenders. If you already have a trusted lender you’ve worked with in the past, great! If not, we’d be more than happy to make a few recommendations. Local mortgage companies are usually your best bet, as they are easier to get in touch with and offer a higher level of personal service than bigger banks or credit unions. Many mortgage companies have sub-specialties as well, like handling Jumbo loans or loans to borrowers who are first-time homebuyers or self-employed. Some can even help borrowers with advice on cleaning up their credit so they’re in a better position to apply for a loan.
Contact us at [email protected] if you’d like some recommendations. We have many trusted lenders we can put you in touch with!