10 Tips for Buyers in a Seller's Market

As housing inventory levels remain low, and medium home prices sky rocket, the biggest challenge for buyers in Austin is getting a home they like under contract. “Insufficient supply appears to be hampering prospective buyers in several areas of the country and is hiking prices to near unsuitable levels,” said Lawrence Yun, the chief economist for the NAR, in a news release. “Stronger price growth is a boon for homeowners looking to build additional equity, but it continues to be an obstacle for current buyers looking to close before rates rise.” Inventory remains flat at less than 1 month with 6 months being balanced.

When facing a seller's market, it is imperative that home buyers begin their search knowledgeable and prepared. Here are some tips that can help you navigate the market and ensure you buy the best home at the best price:

Start Your Search Online: Check out some listings in different neighborhoods and determine which areas you like and don't like. Drive around these areas to get a feel of the neighborhood and see if it provides the amenities you prefer, works with your commute and is within your desired school district. This is also a great time to really think about what your must-have items are and determine what you are willing to compromise.

Get Your Financing In Line: Before you begin your search, a visit with a mortgage professional can ensure that all aspects of your financing are line for loan approval. This initial consultation will determine if you need to repair your credit and pay off certain debts. In a competitive market, such as the market in Austin, sellers won't allow agents to show their homes to buyers who don't have mortgage pre-approval. Many homes in Austin are sold within hours or days so there is no time to organize financing after you have found that perfect home.

Get Pre-approved: Be sure to prepare all the appropriate paperwork for your mortgage officer ahead of time. After the initial consultation, a lender should give you a list of everything they will require for your approval process. Since the recession, things have become much stricter and you will need to provide all documents that your lender requires. The hurdles you will have to jump over are worth it as interest rates remain historically low.

Find a Good Realtor: There is no cost for buyers to use the expertise of an agent as the commission is always paid by the seller. In order to ensure you are using the best agent for the job, make sure they are working full-time and are experienced in the areas you are looking. It may be beneficial to interview several agents to find the best fit.

Check Neighborhoods at Different Times: When you begin your search, it is important that you find a neighborhood that fits your lifestyle. Upon further investigation, you may find that you could have a carpool lane in your front yard, or that it is crowded at night or on weekends. Check out the neighborhood on foot and talk to neighbors as you pass. If you are looking for certain features, your neighbors and agent can let you in on some undercover gems.

Determine Needs Versus Wants: I suggest making a list of 5 things that you absolutely won't compromise on and then a list of bonuses. This will help you concentrate on what is most important and clarify your goals as you begin touring homes. For example, if you are looking for a home that HAS to be zoned for a certain school, it may not have an updated kitchen, but it does have a big backyard. What is most important to you? There will always be compromises. By keeping your priorities at the forefront, it will be much easier to determine which homes are a good match.

Be Ready to Make a Decision: The best homes are moving within hours, sometimes before they even hit the market. Mentally prepare yourself to make a decision when you find a home that checks all your must have boxes. There is rarely ample time to think it over as there is a line of potential buyers ready to move on the same home.

Get All Your Ducks in a Row: Keep your extra cash liquid for offers and be ready to go in with best possible terms. This will be different for every area and house, which makes it that much more important to hire an agent who knows the ins and outs of what is happening locally.

Only Buy What You Can Afford: Don't assume that the number your lender approved you for will fit into your budget. When calculating what you can afford, remember that your mortgage is a small percentage of what it costs to be a homeowner. You are responsible for insurance, HOA, taxes, yard maintenance, repairs, furniture and utilities. With many homes selling far over listing prices, its important to take additional cash needed into consideration.

The Austin real estate market is competitive, but I have developed a proven method of setting my clients up for success. Interested in purchasing a home in Austin? Let’s connect.