The first thing buyers should
know is that they’re entering
a seller’s market. This means
you’re not likely to cut a deal or get
discounts—sometimes even if the
home needs major repairs. That’s
because supply is severely lagging
It’s crucial to sharpen your homebuying
tools if you want to compete
successfully. Here are the top buying
strategies experts recommend.
1. Get a Mortgage Preapproval
While there are various methods
sellers can use to snag a home in today’s
rabid market, the one resounding
rule all experts agreed on is to get
a mortgage preapproval before you
begin house hunting.
A preapproval shows sellers a
lender has verified your finances and
creditworthiness and you’re ready
to move. In just the last couple of
months, for example, preapprovals
at Bank of America have spiked, with
about two-thirds of the applicants
being first-time buyers, says Ann
Thompson, a consumer lending
executive at Bank of America.
2. Look for Homes Under Your
Budget So You Can Bid Up
Tales of multiple—sometimes
dozens— of bidders —on one home
are not hyperbole. This is real life
in housing markets across the U.S.
For buyers, that means you probably
shouldn’t look for homes at the top
of your budget, as you can count on
someone else outbidding you. Just be
sure this is true for your area.
If you’re serious about buying
a home now, a good strategy is to
search for homes below your spending
limit. This way you have room to
bid up without dipping into savings
or going outside of your target price
3. If You’re Borrowing Money,
Give Yourself Extra Time
It’s not uncommon for first-time
homebuyers to borrow money to
make a down payment. However, this
should be factored into your timeline.
Talk to your lender about any funds
you expect to receive so they can
walk you through the process. For
example, if someone is giving you
money for the down payment, they
will have to write a gift letter explaining
that you don’t have to repay the
Also, many mortgage brokers will
want to see bank statements from the
account those funds are coming from,
says Yawar Charlie, director of the
estates division at the Aaron Kirman Group in Los Angeles
“They will want to make sure the funds are ‘seasoned,’” Charlie says. “And what that means is that the funds have been in the bank account for at least two to three months; this is so they can identify the source of that income and make sure it is, in fact, valid.”
4. Get the Best Real Estate Agent Possible
An excellent real estate agent is every buyer’s secret weapon. They’re not only great negotiators and have a solid understanding of the neighborhood you’re interested in, but they also have terrific connections, which will benefit you.
Before you hire an agent, make sure you check out their reviews, talk to people they’ve worked with and find out their experience. Once you narrow your list of top contenders, experts say you should ask important questions before sealing the deal.
Before hiring a real estate agent the majority of the panel of experts surveyed by Forbes Advisor said you should ask about the agent’s experience, including how many properties they sold in the last year. You should also read the agent’s reviews on Google and Yelp and get referrals from people who have worked with them.
Then, be sure to ask these questions:
•How familiar are you with the neighborhood I’m interested in?
•What access do you have to properties that are not yet listed?
•What is the most challenging deal you made happen?
•How can you make my offer stronger/stand out in a competitive market?
•What are your fees?
5. Don’t Fall in Love With Just One House—But Don’t Give Up Either
Most experts advise against getting fixated on one house, as that can lead to major disappointment, or worse, bad financial decisions made out of desperation. However, that doesn’t necessarily mean you should run the other way at the first sign someone outbid you or came in with a tempting all-cash offer.
As all real estate agents with some experience can attest, deals fall through every day.
“Be prepared to be a second choice,” Beer says. “It might work out well for you.”
6. It’s Not Always Just About Price
Look beyond the cost of the home when you’re trying to win a house. You and your agent should find out what (beyond the listing price) is important to the seller that might give you an advantage.
“You may win on other contingencies or conveniences for the seller,” says Ryan Dibble, chief operating officer at Flyhomes, a Seattle-based real estate startup. “One example would be closing earlier and offering the seller a short rent back to allow them an easier move into their next home.”
7. Expand Your Search
The most sought-after neighborhoods come with the highest price tags. If you have your heart set on owning a home and living in a specific but out-of-budget neighborhood, you might have to choose between them. For those who opt for homeownership over a coveted ZIP code, that means looking in other areas.
Start by identifying what you like about your dream neighborhood. Are there local restaurants and businesses nearby? Are there green spaces? Is it near public transportation? Whatever features you value, try to find them in areas you might not have explored before.
Why should you go the extra mile? Often people overlook “beautiful neighborhoods with great schools just because they aren’t buzzy,” Dibble says