Looking for a home in a hot housing market, where homes are selling above asking price with no contingencies? Take a deep breath - there are ways to navigate a hot housing market without getting sucked into the madness.
If you know you're in a hot market, you'll want to make sure that you don't get overheated and lose your cool. Follow these tips to get your dream home - with less stress - even in the hottest markets.
Tip 1: Look Before You Leap
Spend some time looking at listings before getting serious. Scan real estate websites and tour open houses to get a feel of the market. This will help you better understand what types of properties are available and which neighborhoods you might prefer, and will also give you time to get a handle on the market without feeling the pressure of having to make an offer.
Tip 2: Find a Great Real Estate Agent
Having an excellent agent is essential for navigating a hot housing market. A great agent will hear about the listings as soon as they hit the market, or even before; and they also know how to make your offer stand out amongst the rest, meaning you'll experience fewer heartbreaks.
Speak with a few agents before choosing one to represent you - ask them about how they help in finding a home, how they put in bids and what's their track record for winning offers.
Tip 3: Make Yourself Available
Don’t limit your availability to see houses. Be ready to view properties as soon as they hit the local multiple listing service.
Tip 4: Accept Compromise
In a hot market, knowing where to compromise might be the key for winning the proverbial bidding war. Some factors - such as a dated kitchen or unattractive bathroom fittings - are relatively easy to change and shouldn't turn you away from a property.
Also, consider within your perfect property checklist what you might be willing to compromise on. If being close to a main street or a commercial area doesn't really bother you, it's possible that type of compromise can help you get a property in a neighborhood you otherwise couldn't afford.
Tip 5: Line up Financing
The last thing you want is to have the perfect house lined up and have a too-slow loan officer ruin the deal for you. Make sure you've spoken to lenders and mortgage brokers beforehand - comparing interest rates and costs between them before placing a bid.
Tip 6: Close Quickly
Even if sellers aren't in a hurry, they still will be happy to get their properties closed without a wait - and in some cases, offering a short closing time might just tip the scales in your favor. In fact, some homeowners looking for a quick sale might accept a slightly lower offer if they're sure the deal will get done quickly.
Tip 7: Wave Contingencies
If possible, wave any other contingencies as well. Hot markets won't allow time for selling another home, and you'll even stand a better chance if you're comfortable waving the financing contingency as well. These contingencies exist to protect your money, and your rights, so be sure you understand what risks you’re taking prior to waving them.
Tip 8: Take a Chill Pill
In a hot market, you might make a dozen offers before getting one accepted, but it's important that you don't get desperate and make bad decisions. Make sure to keep your cool, even if the process takes longer than you would like. You might consider renting a property nearby for six months or a year to buy you time to find the perfect fit.
Also, consider a bit of humble pie. In hot housing markets, it can be okay to overpay a little bit, as long as you're not planning on selling soon - the strength of the market should make up for the difference in price over time.