The Wisconsin housing market is heating up, which means there is competition among home buyers. Buying a new home in a seller’s market can be a daunting challenge. The key to being a successful buyer is to be prepared and plan ahead. There are several thing you can do to improve your chances of landing the home of your dreams. As with any competition, there are winners and there are losers. You can’t win every time, but with a few strategies in place you improve your chances of coming out on top.
The real estate market is constantly changing, and experts are predicting as strong market in Wisconsin. In Dane county and surrounding areas, the housing market is already hot. This means properties are selling fast, multiple offers are coming in and buyers need to be on their game. So how does a home buyer navigate through this fast-paced, competitive housing market? Don’t worry, there are several things you can do to improve your chances for getting the home you want.
You need to be prepared before you even start looking for homes.
Let’s be honest, the most exciting part about house hunting is searching for the perfect house. That is often where people make their first mistake. Looking at homes before your are ready to write and offer can just lead to heartbreak and missed opportunities in this volatile real estate market. Casually looking at homes is fun whether your in the market or not, but once you get serious about buying, you’ll need to get your homework done.
Step 1 – Contact a Mortgage Expert
Unless you are paying cash for the home, meeting with a mortgage expert is one of the very first steps you need to take. You will want to know what you can afford before you start searching for homes. More importantly, you will need to be pre-approved for a mortgage before you even write an offer. A good mortgage expert will go over all of your options. You will be able to see the top end of what you can afford, the average monthly payment you can expect, and the additional costs associated with a mortgage. Many real estate sites offer a mortgage calculator, but that is a very basic tool to show you one small piece of the puzzle. You will want to see the details before you determine your true price range.
Sellers are going to want a pre-approval letter before they will even look at your offer. They aren’t just going to take your word for it that you can make good on the loan. Once you fill out a mortgage application, a mortgage specialist is able to determine how likely you are to be approved for a home loan at the desired price range. They will provide you with a pre-approval letter which will get attached to the offer as proof to the seller that you are serious and capable of affording the home.
You may choose to get a pre-qualification rather than a pre-approval because this is a quick and simple process, but it generally doesn’t hold much weight with a seller. The pre-qualification is also generated by a mortgage specialist, but it gives a more general overall picture of how large of a home loan you might get approved for. You do not need to fill out an application to receive this type of letter. A pre-qualification does help you determine your price range and most real estate agent will ask you to do this before showing you properties.
Step 2 – Select a Real Estate Agent
A buyers agent, or real estate agent, will not only help you find the home you’ve been looking for, but they will also negotiate on your behalf. A good real estate agent is key when you’re looking to buy during a seller’s market. They will help you set realistic goals, find properties as they hit the market, and write a solid offer to purchase. You’ve heard the saying, “It’s not what you know, it’s who you know”, this rings true in the world of real estate. Agents talk which may mean you get a jump on a new listing, or your offer will stand out because of how credible and reliable your buyers agent is. Ask around for recommendations, check reviews, references and testimonials when choosing your agent.
Step 3 – View a Property as Soon as Possible
Don’t wait to view a property you might be interested in. If there is an open house scheduled, do your best to see the house prior to the open house. Walking through the property when it first goes on the market may decrease the amount of competition. Some homes in Madison or surrounding cities have an accepted offer within 48 hours of hitting the market. That being said, don’t jump into something that isn’t exactly what you’re looking for just to get a jump on the offer.
Step 4 – Don’t Hesitate to Make Your Best Offer
If you look at a property and you really know you want it, don’t wait to make an offer. Chances are if you want it, someone else does too; so time is of the essence. In order to be competitive, it’s a good idea to know what the seller is looking for. Some sellers need to close quickly, some are looking to close on a future date, some are looking for the best price or simply the lowest risk. The best offers will have the least amount of contingencies. Offers with contingencies to sell a home are often disregarded in a competitive market. If you currently own a home and can qualify for a mortgage on your current home as well as the new mortgage, it will strengthen your offer. Don’t hesitate to check with your mortgage expert to see if this is an option. Although it can be a risk, that risk diminishes greatly in a sellers market as it’s more likely your current home will also sell quickly. Other contingencies are common and do not deter sellers, such as home inspection and financing. Be prepared to make an offer at or above the asking price in order to be competitive. Your buyers agent can help you make a decision that you are comfortable with based on the current circumstances.
Step 5 – Don’t Become Desperate
Even if you lose out on the first 4 offers you put in, don’t lose hope. Many buyers become over anxious in a seller’s market and can leap into something that’s not right for them. This is a big purchase and a big decision. It may affect where your kids go to school, how safe your neighborhood is, how long your commute to work is and many other factors. Don’t jump into something before your ready just to try to gain the upper hand. New homes for sale will be popping up every day, so be patient and wait for the one that’s exactly what you’re looking for.