The housing market, thus far in 2021, indicates that the demand for homes is high and supply is starting to dwindle. So as the year progresses, it may be a bit more difficult to find that home that is right for you.
But picture this scenario: You have found a home you really like. It is in a great school district for your kids. It has great public amenities, easy access to the businesses you frequent. It checks all the boxes for you. But there are three other bidders who think the same home is the home for them too. So how do you go about winning this bidding war? Here are a few ways:
- Get pre-approved with a lender: Don’t confuse this with being “pre-qualified.” Pre-qualification is based on estimates and gives homebuyers a general idea of what they would qualify for. Getting pre-approved is a more formal process in which a credit score is obtained by the lender instead of just being estimated and financial statements are reviewed. If you as a homebuyer are pre-approved, that inspires more confidence in home sellers and real-estate agents that you have the financial means to make the purchase. You may even ask your lender to vouch for you with the seller of the home you’re interested in.
- Know your financial limits: You certainly don’t want to place your first bid at your limit. Even if you aren’t sure others are interested in the same home, assume there are and that they will counter your offer. So you need to leave yourself some wiggle room. You may want your real-estate agent to let the seller know that you are willing to negotiate on terms. You may even consider an escalation clause in your offer where your bid automatically goes up when another offer comes in.
- Write the seller a personal note: A little personal interaction can go a long way. When there isn’t much difference among offers, something as simple as a personal note could be the deciding factor. Be sure to check with your real-estate agent and make sure that anything included in a note doesn’t violate fair housing laws.
- Be flexible with when you want to move in: The seller may have a time in mind when they want to move out, and you certainly may have an idea of when you want to move in. The two may be incompatible. If you can, consider moving your timeline for moving to accommodate the seller. That kind of flexibility can be the difference between your offer being accepted and another bidder having their offer accepted, especially if the offers are very close to each other.
- Carefully consider the contingencies in your purchase contract: In case something happens with the purchase and you aren’t able to close, you certainly don’t want to lose your earnest money. So there are some contingencies you want to build into the contract so you can keep your earnest money in case something unforeseen happens. An example would be that the home inspection reveals the home will need major repairs. But if you have quite a few contingencies built in, you may want to consider paring that list down, especially in a competitive housing market.
Better Lending wants to see you in the home of your dreams. And we are ready to help. When you’re ready to start exploring your options, call us at 888-400-1373 or email [email protected] to speak with our experienced team.
A USDA loan is perfect for anybody that doesn’t particularly enjoy the hustle and bustle of a big city, learn how easy it is to qualify!
When looking for the best neighborhoods in Chicago there’s a lot of options to consider, join us in looking at the top 10 in Chicagoland.
A new family will need to cover the bases of what to look for in a new home, checkout our list of what aspects of homebuying to lookout for.