Buying a home in a competitive seller's market presents unique challenges for buyers. After all, any home you truly love in your budget may get multiple offers and possibly even a bidding war. There's no need to feel defeated, however. Instead, simply approach home buying a bit more strategically than you would in a less competitive market by following these tips:
Have a Firm Budget in Mind
One mistake buyers make in a competitive market is getting caught up in the need to "win" a home, which can lead to outbidding everyone regardless of your actual budget. This can leave you in a situation where you own a home that's more expensive than you ever intended, with your mortgage making up an uncomfortably large portion of your monthly budget.
To avoid this, it's important to have a strict home budget in mind before you look at homes. Start by getting pre-qualified for a mortgage so you know how much you can reasonably expect to borrow. Then, take an honest look at your income and other expenses. In most cases, it makes sense to buy a home that's a bit less expensive than what you technically qualify for. Work with your mortgage broker to estimate your total costs, including homeowner's insurance and property taxes.
Plan to Be an Easygoing Buyer
A seller's market is not a good time to be a high maintenance or difficult to please buyer. Even if you are a qualified buyer offering at or above asking price, a seller may choose to sell to someone else if they think you will make the transaction too difficult. This means not giving in to the urge to list a ton of contingencies in your offer. If there are minor repairs and cosmetic improvements, plan to make them yourself once you own the home instead of demanding that the home seller do so.
Have a Flexible Schedule
In a seller's market, the early bird gets the worm. If your real estate agent tells you about a great house that's available to see the same day, do whatever you can to do so instead of scheduling something for days away. If you delay seeing houses for sale, someone else may snatch them up before you have a chance to even take a look. In very competitive markets, you may even want to take a few days or a week off of work and secure on-call childcare to ensure you are available to go look at homes for sale.
Working with an experienced buyer's agent and following these tips will help you stand out from the competition and successfully purchase a home your family will love without going over budget.