Even in the best of circumstances, buying a home can feel stressful. But in a seller’s market, that stress intensifies. With more buyers in the market than available homes for sale, competition is stiff. Here are a few tips to help you navigate purchasing a Jersey Shore home during a seller’s market.
Buying a Home in a Seller’s Market
Your very first step should be to make an appointment with your lender. Buyers want to see a pre-approval letter included with your offer. Also, with a pre-approved loan, you now have a guideline as to the maximum you can spend on a Jersey Shore home. That helps you create a budget and limit your scope to only those homes you know you qualify for. Avoid the heartbreak of falling in love with a home just to find out you do not qualify for it. Get pre-approved now.
Hire a Knowledgeable Agent
Next, interview real estate agents. Find one who knows their stuff about the local market. Make sure your communication styles mesh. Also, check their references.
Flexibility is the key to success when buying a home in a seller’s market. Separate your “wants” from your “gotta haves”. That fourth bedroom might be nice, but you really could get by just fine with three. Maybe the flooring looks a bit worse for wear and the appliances are outdated, but the location is “chef’s kiss” perfect. With limited inventory, you need to remain flexible or you might miss out on a home.
Put Your Best Foot Forward
I cannot say this enough. Put your best offer in first. Do not lowball hoping for a counter offer. What you might receive instead is a rejection. Chances run high that you could be just one of many offers. The lower your offer, the higher the possibility that it gets rejected. You might even want to put more earnest money down to show how serious you are about buying the home.
Contingencies are conditions the buyer wants met before a sale can be completed. For example, if a buyer needs to sell their home before they qualify to buy a new home, they might ask for a home sale contingency. Or a buyer might ask for a home inspection contingency to allow an inspector to look at the condition of the property. Buyers may ask for some contingencies when buying a home. But the more you ask for, the more complicated the sale becomes. In turn, a seller may consider another offer without any contingencies, even if it comes in at a lower price than yours. Talk to your agent to determine whether or not to include contingencies in your offer.
Stick With Your Budget
Finally, when buying a home in a seller’s market, create a budget and stick to it. In multi-bidder situations, it is easy to get carried away. In an effort to “win”, you may bust your budget. When you stick to the parameters you set to start with, it helps you stay focused and lessens the chance of spending more than you should. Also, make sure you have a little extra money put away in case the appraisal comes in low. Why? Because banks only approve up to the amount a home is appraised for…not a penny more. So, if you love the house but the appraisal comes in lower than your offer, you may need to pony up a bit more cash to make the deal happen.