The real estate markets go through cycles regularly, making it tough for anybody who is buying a house for the first time. Today, though, the market has become quite unique – but not in the best way. This is bad news for buyers because of low interest rates, tight lending and skyrocketing home prices. The question now is this: how can you – as a buyer – protect yourself from making offers which are too high in the current market? Below are some guidelines for those who are interested in investing in real estate.
1. Investing in a Great Agent
Many buyers are hesitant when it comes to getting real estate agents. The truth is having an agent on your side can be worth the money you invest, especially in markets with multiple offers. In many states and countries, paperwork comes in mounds and regulations to check out can be taxing for most buyers. One advantage of having an agent is being able to keep yourself abreast with the newest listings. In such competitive markets, having the right connections can create a world of difference when buying a house for the first time, especially in a sea of hot listings.
2. Getting Pre-Approved
Negotiating in markets with multiple offers can be “dirty”. Needless to say, the cleaner the offer, the better the odds are of closing the deal. One way to achieve this is by getting pre-approved. Home sellers absolutely love buyers whose financing has already been approved beforehand. This way, they need not worry if the buyer would pay up or not. On the side of the buyer, being pre-approved gives you the advantage of being on a position to negotiate better deals. With this said, this step is definitely a top priority when delving into these markets.
Another advantage is your credit report. A common problem is learning that you have a credit report problem just as you have made a deal. This happens because of simple errors or loan approval steps that have been missed or forgotten. Of course, getting pre-approved will help you prevent any of these problems from occurring. And if such problem comes up, you will have the chance to fix it before making any deal.
3. Making Attractive, Clean Offers
If a seller has three offers with similar pricing, which do you think will he/she choose? And more importantly, what is a “clean offer”? Going back to tip #1, your agent comes in handy. An agent can pry information from the agent who made the listings regarding the seller’s preferences and motivations for selling. This gives an obvious edge over the competing offers. For instance, you can offer a bigger down payment, leaving other buyers shying away — letting you experience a smoother transition when buying a house for the first time.