The real estate market has been a bit crazy this year – I am not sure if I have ever seen this many multiple offers and of course all we hear is the lack of inventory. Buyers, especially first time homebuyers get frustrated and may decide the entire process is too difficult and just continue to rent. So what can you do to make your offer on a home as strong as possible?
Here are a few tips that may help you –
-Check your credit before you apply for a mortgage – you can get free credit reports through many different services. Credit Karma is one option, another free option is  http://www.annualcreditreport.com. By checking your report ahead of time, you have a chance to fix any errors that may be on your report. Pay down your credit card balances as much as possible to help raise your credit scores.
-Save some money. The more you have saved for a down payment, the better – if you can put money down and pay your own closing costs, it will help you in today’s market. You need a minimum of 3% down for conventional financing and 3.5% for FHA loans. There are first time homebuyber programs that can help with the down payment. Ideally you want to pay your closing costs if possible – that way you don’t have to ask the seller for a seller contribution and it may be easier to get your offer through. Appraisals can be an issue and if you don’t need the help with closing costs, it can definitely make you a stronger buyer.
-Talk to your loan officer. Get an idea of what you qualify for, what programs are out there that may help you. Ask about down payment assistance and any other programs that can help you purchase your home. Find out what you qualify for so you aren’t looking for homes that are more than you can afford. Get an approval letter – you want to be as strong a buyer as possible so having the approval letter helps!
-Define your needs. Talk to your realtor and decide what you want/need in your new home. Make a list of things you have to have and a list of things you would like to have. Decide on the area and from there, you can start your search. Remember new homes come on the market every day and with the current inventory, you may need to go see the home the day it comes on the market or you may not have a chance at the home of your dreams!
-Make your first offer your best offer. With the current market, I’m seeing a lot of listing agents ask for your highest and best offer within a couple days of the house coming on the market. If the house has been on the market for a while, you may be able to start lower and negotiate, but if you are in multiple offers, make your first offer your best offer. You may not get a chance to submit a higher offer.
The market will eventually change but it still seems to be a bit crazy out there! Make sure you have your mortgage approval ready to go, get a letter from your lender and have fun shopping! Know that you will find a home you love, it may just take a bit longer – and you may be writing more than one purchase agreement!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
