Top Insider Tricks to Landing the Home You Want
Get the home you love, without being outside your means.
Cut yourself some slack, purchasing a home is hard. Factor in a competitive housing market (high demand, low supply, and so on), finding a dream home seems nearly impossible. We’re here to tell you that it is possible. It’s just going to take a lot of patience and some crafty maneuvering.
Below are a handful of tips that will help you find a home you will love, without reaching too far outside of your means.
Start Planning Now
Unless you’re sitting on a mountain of cash, acquiring a home loan will be a major part of the process. So start getting your finances in order by following these seven tips, including getting preapproved for a mortgage.
When it comes to shopping for the best mortgage rates and terms, you may want consider going with a bank that provides “portfolio loans.” This means they keep your mortgage on their own books, and won’t package and sell it to investors. Two reasons why this matters: 1) they’re likely more flexible with financing, since they don’t have to meet additional Federal requirements, and 2) it means the lender is well capitalized.
FirstBank might be a good place to start, since it offers several straightforward mortgage options, and its loan officers aren’t paid on commission. It’s also unique in that it underwrites its own loans, meaning officers have the authority to make most loan decisions quickly.
Search Above Your Budget
In general, most of us naturally gravitate toward round numbers. When setting a budget, it’s far more likely we’ll veer towards $350,000, not $379,350 (the median sales prices for a Denver townhome). Keep that in mind when setting filters on your favorite realty app or speaking with your realtor, because buyer competition is typically higher around those even numbered price ranges.
Here’s a solution that seems crazy, but it works: let’s say your budget is $380,000, open up your search to include listings above $400,000. The competitors will be fewer and the pressure will be lower. Also keep in mind that homes listed above the recommended asking price stay on the market longer. Employing these techniques will increase the chances of coming across a property that may be willing to concede to a lower offer.
Close your eyes and imagine the home you want. Does it have two-car attached garage? Was the kitchen recently updated? That’s a sweet house. When can we move in?
Probably not anytime soon. When the housing market is as competitive as it has been, the ideal home will most likely be outside of your price range. It’s a tough pill to swallow, but that’s the time to adapt. Prioritize your needs. Factor in your wants, and be reasonable with must-have features. A solid foundation takes precedence over a kitchen island.
Building on that last point, most homes on the market need some work. Heck, most homes are on the market because they need some work. Don’t let that point scare you away from a purchase. There will be some issues around the house that will need to be addressed by a professional. But there are smaller issues that can be handled with a quick Google search and trip to the hardware store. Come to peace with this going in, and selecting a house will be easier. Control what you can and don’t let small problems become deal-breakers.
Position Yourself in the Best Light
Joe-seller has been living in his home since the 90s. He is relocating for work. While living in said house, he built lasting relationships with his neighbors. His family has a mutual respect for these neighbors and will be lifelong friends…
There are two similar offers on the table. But Buyer-A is a young couple who are well-mannered folks, appropriately dressed, and generally pleasant to be around. Buyer-B is also a young couple who have a cold demeanor, while lacking respect for Joe’s time. Keep in mind that Joe maintains some personal responsibility for his friends’ future neighbor. Who will get the house?
This is one of many examples of why it’s important to present yourself in the best light. It could be as simple as being responsive and communicative with the listing agent. Treat this like a job interview and appeal to a seller’s soft side.
Bring Something Extra to the Table
By bringing something “extra” to the table, it can help bolster your position as a buyer, especially if there are multiple bids. For example, a few years back, a seller with a popular Denver neighborhood home received multiple offers. Instead of accepting the highest bid, she accepted the lowest one, offering $25,000 under asking. True story. Now why would someone do such a thing?
Turns out, the offer she accepted included an incredibly heartfelt letter, from a local teacher, explaining how much she loved her house and wouldn’t change a thing. Sappy? Maybe. But for most longtime homeowners, it’s not uncommon to get attached your house and want it to end up in good hands. You might be surprised by how a sincere letter can appeal to a homeowner’s emotions.
But what if your seller isn’t sentimental? Real estate experts suggest one of two things: 1) offering over asking, or 2) including an escalation clause, meaning you’ll raise your bid if someone comes in with a higher offer. Of course, make sure you can reasonably afford and are approved for an increased offer.
Time it Right
Start looking in the fall, and purchase by the early winter months. According to a 2017 Trulia research report, peak inventory for starter homes is October, followed by November and December. This coincides with minimum listing prices spanning from November through March. Even though inventory decreases in the winter, the number of buyers takes a bigger dip. It’s no different than beating the crowds at a popular event. People are less likely to make moves in the winter, especially during the holidays. Take advantage of this lull and enjoy the lighter competition, and quicker response time from your realtor.
Please, be patient. Just because the market is tough for a buyer, doesn’t mean it’s okay to settle on anything below your comfort level. Purchasing a home is a big step with some risk involved. Go out there and be picky. You got this.