Have you bid on multiple homes only to have your offer passed on or rejected? Many folks are looking to buy their first home, relocate because they can now work remotely, or upgrade their home to a more appropriate space. The market right now in many locations is a competition like no other. Just take a look at our recent market report to see what’s going on. So what can you do if you’re looking to buy a home?
Get professional help
Get the kind of professional help, not just from any agent but from an experienced qualified agent that will tell you the truth. As a buyer right now, do not work with an agent that won’t provide you with a CMA (comparative market analysis) or price analysis on any home are trying to buy.
Although most times, the price will be higher than the market indicates, you need to know how much above the market you are offering. Make certain they provide you with an estimate of cash required at closing. Many are offering to pay expenses the seller normally pays but be certain you know how much additional cash that will require.
Know your position
Cash is king right now! Not only do cash offers rise to the top because of no appraisal contingency, but they can also close quicker. If you are financing, it is necessary that you estimate the appraisal value of the property and determine the maximum loan you can get. The bank isn’t simply going to loan you more money because you have to pay a higher price!
Once you know that, a qualified agent can help you determine the amount of cash necessary to actually close. Make certain you can provide the seller proof that you have this cash amount. Family help, 401Ks, home equity are a few additional sources.
Also, reduce the contingencies by obtaining a pre-approval from your lender. This is not a pre-qualification! Go through the application process, provide the required documentation, and have an underwriter give you conditional approval. That means they will condition on the property’s appraisal and your continuing good credit. Without a pre-approval, a seller sees another time period for you to go through this process, and this is not desirable.
Know with FHA and VA guaranteed loans, most sellers will see a long timeframe before they would know if you qualified and if the property will appraise. If they find this out 30 days from now they may have lost other bidders and will have to start over. A good agent can show you how to offer more than the appraised value and make the seller more comfortable that you won’t walk away if the appraisal doesn’t come in high enough.
Let your agent know what your circumstances are and make certain they are qualified to assist you in determining what you can and are willing to do. Ask them about CMAs and cash requirement calculations.
And finally, see if they can recommend a lender who will pre-approve you and make certain they know how to structure your FHA or VA offer to give you the best chance.