Have you checked into any real estate lately? If so you’ve probably noticed that prices are up in most places and the market is favouring the seller. That means even if you find a home and offer the asking price you may not get the property. Instead, you find yourself in the midst of a bidding war. That’s great for the seller, not so much for the buyer unless you’ve done your homework and perhaps have a few tricks up your sleeve.
The first step in looking for a home should be taking a look at your own financial situation. Make sure there are no surprises in your credit rating. If anything needs taken care of, do so. Then get pre approved for your mortgage. That will keep you from bidding too high on a home that really doesn’t fit your budget. Keep your realtor in the loop about the amount of your down payment and your pre-approval limit. The minimum down payment required is 5 percent but if you can swing it try and up that amount. Showing flexibility and having that pre-approval shows that you are serious. If it comes down to you and another party bidding roughly the same price and you are the only one pre-approved, chances are you will win the bid.
Once you, or your realtor, find a listing that proves interesting don’t wait to schedule a viewing. The sooner you look the sooner you can start thinking about whether that property is right for you. It also gives you a chance to see the home again. You often catch things you missed on a first look, sort of like rereading a book and coming across a point you missed the first time around.
It may seem redundant because most sellers provide an inspection list before the home is listed. But on a purchase of this size it doesn’t hurt to have your own inspection done. Find a reputable firm, your realtor can help there, and make sure everything is properly documented. On some occasions the seller doesn’t have an inspection done so it’s up to you to schedule your own. Make sure it’s done before the offer date. Putting a home inspection condition on the bid might put you out of the running.
Once a buyer accepts an offer, it must be backed up with a certified deposit that is usually 5 percent of the agreed purchase price. The payment is handed over to the seller on presentation day so make sure the funds are in your account to secure this check. Coming prepared with money in hand increases your chances of winning the bid, even if others have offered more money.
Your real estate agent can help you with this. The Comparative Market Analysis lets you compare prices paid for homes similar to the one you’re interested in. By analyzing the neighborhood based data you can find out what the minimum bid is likely to be. From there interested parties keep bidding until a bid is accepted. The average of all bids is known as the market value.
Are you looking at a home you just can’t live without or are you somewhat lukewarm about the sale? Though it helps not to show the seller your hand, as they say, let your realtor in on your true feelings. If this home is one you just don’t want to loose, you realtor can help you calculate a bid that is likely to win. Even at that, some homeowners are unrealistic in what they think they can get for their homes and may price themselves out of the market. You don’t want to buy a home that is severely overvalued, no matter how much you may like it.