How Buyers Can Still Win in a Seller’s Market

Housing prices have been skyrocketing to unaffordable amounts this year. So how is it possible for homebuyers (especially first-time homebuyers) to win in such a competitive market? 

The first thing you must do is get pre-approved by a lender. That means providing proof of income, tax documentation and employment letters, as well as doing a thorough review of your credit. If there are mistakes or issues with any creditors, correct them right away. You need to fully understand how much money you have for a down payment, and how much your mortgage payments and closing costs will be. Fortunately, interest rates are at an all-time low. 

Research relators

Next interview a local realtor (or several) who understands the market in your area and can explain exactly what they plan to do to help you. I go through my new buyers’ needs and wants, discuss their financial position and help them fully understand what is happening in the market where they plan to buy. I also calculate how much their closing costs will be based on the purchase price. Find an agent who you trust and feel comfortable working with. 

Saving for closing costs

Closing costs include lawyer’s fees and disbursements (title search, registrations, title insurance, etc.), Land Transfer Tax (first-time buyers only pay tax on the purchase price over $400,000), pre-inspections and moving costs. This could potentially add up to thousands so make sure you factor them in when doing your calculations. 

Some of the ways you can stand out from the competition when submitting an offer are having no conditions (do a pre-inspection), offering a large deposit, being flexible on the closing date and the no-fail, offering the highest amount. Be careful, however, when offering over asking price as your lender may send an appraiser to value the property. If the value is lower than what you have paid, you will have to make up the difference. These are all things you should discuss with your lender and realtor prior to making an offer. 

Above all, stay positive, be realistic and listen to your chosen experts and you’ll be a homeowner before you know it.

Debbie Braun, Realtor at Keller Williams