It’s already a hot Texas summer and summer, and the real estate market doesn’t plan to cool down! According to the National Association of REALTORS®, the median existing-home price jumped up almost 25% compared to last year for an average of $350,300. Home prices are the first challenge; the second is inventory. According to title insurer First American, 115 out of every 10,000 homes were for sale this spring. It’s the lowest share ever recorded! Mortgage rates are still below 3%, so it’s the perfect time to buy a home this summer. Here are some strategies to help you come out on top as a homeowner.
1. Get Pre-Approved For a Mortgage Before Buying a Home
Before even browsing online for homes nearby, you must be pre-approved for a mortgage if you want to make an offer in today’s market. A mortgage pre-approval is a written statement from a lender confirming that you’re qualified for a home loan. The pre-approval will be based on your credit report, income, debt, and financial accounts. When you make an offer on a home and include a pre-approval letter, this shows the buyer you’re a serious and qualified buyer.
2. Work with the Right Lender and Real Estate Agent Before Buying a Home
According to the Austin Board of REALTORS® May stats, houses are spending 16 days on the market. Homes are selling extremely fast, so there’s no time for lag. It’s why working with a quick, responsive lender and REALTOR® will make all the difference. You might need a pre-approval letter at a moment’s notice, so you want to make sure your lender is available. As for a real estate agent, you need someone who has a tight connection with other REALTORS®. This network will help give you the leverage you need as your agent can hear about homes before they’re listed. And lucky for you, that’s us! Thanks to my local connections, we can work with other agents who help us succeed at being a buyer’s agent.
3. Be Financially Prepared To Offer Over Asking Price
Since home prices have increased yet inventory hasn’t, it’s common for buyers to offer over the asking price. This tactic tries to outdo other buyers. The best tactic is to shop for properties listed below the top of your budget so you have the negotiating power to offer over the asking price. The downside is an appraisal gap. It means an appraisal is lower than your offer, so you’re responsible for the difference between the appraised value and the price you’re offering. Be financially prepared for this scenario. One solution could be reducing your downpayment and using what remains to cover the difference.
4. Write a “Clean” Home Offer
In a balanced market, it’s common for contracts to include contingencies that let the buyer walk away if something goes wrong. But since we’re in a seller’s market, sellers prefer a “clean” offer that waives the contingencies so the home can close faster. This can be risky because if you forgo a home inspection, you agree to purchase a home as-is, and some damage isn’t always visible. A pre-offer is a way to waive the home inspection while still protecting yourself. The pre-offer allows you to pay for an inspection upfront, so you know there’s nothing wrong with the house. While the inspection can cost $300 to $400, it’s better to pay that cost upfront instead of purchasing a home with significant damage, which will cost you more money in the long run.
Contact us if you need a responsive and knowledgeable REALTOR® to help you buy a home this summer! Reach out to us anytime at [email protected] or (512) 828-7074.
