How to Prepare for House Hunting in a Competitive Market

Hi everyone! Welcome back to another blog. I hope you are doing well and it feels so good to type on the blog again. Quarantine was oh so much fun, and then I jumped straight into a crazy market the last few months. Today I wanted to chat a little bit about that, and how to prepare yourself if you are house hunting in this very hot market.

First let me start by talking about a common problem in the real estate industry. It’s a very “in the moment” industry. For example, you’re scrolling through Zillow for fun, no real intentions of buying a house but you keep hearing about the super low interest rates and stumble upon a house in the neighborhood you’d love to be in and decide, why not check it out?!

Since Zillow’s goal is to charge agents money to put them in front of people like you, you’ll find a selection of agents to choose from right next to this house you want to go see (problem #1)! So you click contact now and send them a message that you’d like to go look at this house.

Let me expand on the problem in our industry, because agents are paying to advertise on those platforms, they quickly respond that they’d love to show you the home BUT: you are not prepared for entering this competitive market which sets you up for a rollercoaster ride house hunt. (Disclaimer: I am not saying the agent on Zillow is not a good agent but the problem with what just went down is that you are not READY to enter the market on the path you just took)!

The reason I spend my time showing up in this space, educating potential and future home buyers on these topics is for this exact reason. I want to keep you AHEAD of the curve. I want to be your virtual resource for all things real estate and Florida life. I want you to have the smoothest home buying experience possible – not one that’s full of ups and downs.

But the only way that is going to work is if you take a few steps back and PREPARE!

So let’s get to the good stuff as I dive into how you can prepare for this competitive market we’re experiencing! If you know someone who needs to see this, make sure you share this with them!

STEP 1: HIRE A BUYER’S AGENT FIRST

  1. Here’s the deal .. if you are even remotely thinking about making a move right now, let’s set up a buyer consultation. We can do this virtually over Zoom or meet at my office where we are taking all the safety precautions.
  2. Hiring a buyer’s agent is 100% FREE to you. If you do end up buying a home, the seller actually pays the commission.
  3. Having a professional represent you during your home purchase is CRITICAL (especially in a crazy market).
  4. A buyer’s agent will not only find and show you homes that meet your criteria, they will also educate you on the market you’re buying in, let you know what to expect, the prices homes are selling for.. all the things.
  5. When you do find that house you want to write an offer on, they will also negotiate on your behalf and make sure you have all of your ducks in a row!
  6. Think of your Real Estate Agent like your house hunting instruction manual. Instead of having to Google your way into oblivion throughout the enter process, you will know exactly what to expect every step of the way.

Now that we have that out of the way, let’s talk about what else you need to be prepared for (before and during the house hunting process):

1. Be prepared to submit a pre-approval with your offer

• I (or your agent) will share a list of lender recommendations so that you can have your official pre-approval letter ready to go before you even start house hunting. Here’s the deal – a seller in this market will not even consider your offer if you don’t have a pre-approval letter submitted with it so be prepared and cross this off your list first.

• You, as the buyer also need to know how high you can comfortably go (broken down into a monthly payment and taking taxes into consideration).

• Most homes for sale in this market are getting multiple offers. That means, if you want to be taken seriously, you have to be able to show that you’re qualified to buy the house. Otherwise, your offer will be the first one tossed to the side which you don’t want (if you really want the house)!

2. Be prepared to compete with other offers

  • In most price ranges, there are currently more buyers looking for homes than there are homes for sale. Supply and demand is telling us that it’s a sellers market.
  • This means that when you find that perfect for you house, it might also be “perfect for” 3 or more other buyers too. This leads me to the next one..

3. Be prepared to move quickly

  • Have you ever seen a cheesy meme that says “if you liked it then you should’ve put an offer on it?” Well as cheesy as that is, it rings true right now! As your agent, I will break down market stats for you like “average days on market” so that you can see how quickly things are moving.
  • When a house you like hits the MLS that checks the boxes on your wish list, you’ll want to make arrangements to tour it as soon as possible and then make a decision on whether or not you want to move forward almost immediately.
  • While being rushed into making a decision to buy a home isn’t ideal – this goes back to being prepared and starting with your agent. You should have a pretty good grasp on your priorities from conversations you had before getting started so that you can make a decision with confidence!

4. Be prepared to offer more than the list price

  • Rewind the clock a few years back and this may have been shocking but by now it’s likely you’ve heard that homes are selling for more than their list price.
  • This is why having that pre-approval and understanding of your budget is so crucial to starting the house hunting process. If you do fall in love with a place, you want to be clear on how much above the offer price you can comfortably and financially go so that you don’t end up in over your head.
  • The question I always recommend buyers ask themselves is “If I lost out on this house because my offer was $X amount too low, how would I feel? You need to determine X and then figure out what number you feel is too high as well. That will help you make smart decisions vs emotional ones and prevent any buyer’s remorse down the road! Let’s recap what you need to do to be mentally prepared for house hunting in a competitive market:

  1. Hire a buyer’s agent first so that you are educated and READY
  2. Be prepared to submit a pre-approval with your offer
  3. Be prepared to compete with other offers
  4. Be prepared to move quickly
  5. Be prepared to offer more than the list price

Do you have questions? You can always reach out to me for advice or to talk real estate. Before I go, I wanted to let you know about my new buyer checklist! I packaged up all the tips I share with my buyers to help their offer stand out in a competitive market and turned it into a PDF checklist that I’m sharing for free! It’s the steps we go over before we start house hunting so they are prepared with options when a competitive offer scenario arises!

If you want a copy, send me a DM with your email address and I’ll send it over asap!

Thank you for joining me today and I am so happy for you starting your house hunting journey.

-Niki Luther

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