Savvy home buyers know that winter is typically a good time to embark on a house hunt, since much of their competition stays holed up at home until spring. But this winter, buyers might notice that despite the cold and the holidays, they've got company.
Lots of it, in fact.
"Normally winter is a good time for buyers," says realtor.com® chief economist Danielle Hale. However, since the coronavirus kept buyers on lockdown for much of spring, many are making up for lost time by home shopping hard right now
As a result, this winter is shaping up to be a seller's market, with low real estate inventory, high prices, and bidding wars that could give buyers a major run for their money.
This doesn't mean you should throw in the towel—just that you'll have to hone your house hunt in new ways to suit the times. Here are some tactics that will keep you ahead of the pack so you'll be sitting in a new home by the new year.
Secure your financing as soon as possible
Getting pre-approved for a mortgage and securing financing are an essential first step when buying a home. It gives you a clear picture of how much house you can afford, and lets you make an offer as soon as you find your dream home.
Getting pre-approved for a loan is obviously important, but is there anything else they can do to put themselves in a good position. Buyers need to be ready to buy a house before they start looking.
Too often, buyers don’t line up their financing until they find a home they want to buy. In the current competitive market, waiting to get pre-approval means you could lose out on purchasing a home you love.
Starting early could also help you lock in an ultralow interest rate, which could affect your monthly mortgage payment and mean you could afford a more expensive home.
Know what you want before you house hunt
COVID-19 has changed how we live and work. We’re spending much more time at home, and people are looking for different features in their living spaces.
Make a list of your must-haves before you start house shopping—and share your needs with your real estate agent.
In such a competitive landscape, knowing exactly what you want enables you to act fast when you want to make an offer.
Tour homes virtually first
More real estate agents are embracing virtual tours and remote showings to ease coronavirus safety concerns. In some cases, they’re even limiting in-person showings to the most serious buyers—those with financing already secured, for example.
Virtual home tours, using Zoom or FaceTime, let you view the home from anywhere, and depending on the setup, you might be able to ask questions in real time. So, you can narrow down the homes you’re most interested in and physically visit only the ones that best meet your needs.
Don't dawdle if you want to make an offer
In November, there were nearly 40% fewer homes on the market than during the same month last year, according to a realtor.com report. At the same time, buyer demand has increased, creating an incredibly competitive marketplace. Homes were on the market for an average of 54 days in November 12 fewer days than last year.
The challenge, is potential buyers have little time to mull things over, and they are pitted against one another.
Wait too long to submit an offer, and another buyer is likely to swoop in with an offer of their own.
Make your offer stand out
Since inventory is so low, sellers are getting multiple offers on their homes these days. To make sure yours gets accepted, you’ll need to make it stand out.
Cash offers and inspection waivers (not recommended) are some ways to make your offer more appealing.
A cash offer, if you can afford it, is attractive to sellers because it eliminates dealing with a mortgage lender and often speeds up closings. An inspection waiver comes with lots of risks, since you’re essentially agreeing to purchase a home as is, but the waiver removes any repair negotiations and helps you close faster.
For competitive markets, where you know you’ll be competing directly with many buyers, talk to your agent about escalation clauses. This is a contract addendum where you agree to pay more than other offers (up to a maximum you set).
Bottom line: Find a strategy to help make your offer stand out amongst the 10, 20, or more offers that may come in on your dream home.