The housing recovery is well under way, although the peak summer sales season seems to be fading. A report last week showed an overall drop in inventory at the national level, which has contributed to rising prices in several markets across the country.
The lack of inventory is actually creating a housing boom-like feel for those buyers at the lower end of the market. This is because the low inventory can’t keep up with demand, and therefore is creating multiple-bid situations, which are driving up prices.
Oakland, Calif., led the nation with the largest decline in inventory, which was down 59.3% from last year. Other cities that had at least a 40% decline in listings from a year ago were Riverside-San Bernardino, Stockton, San Francisco, San Jose, Bakersfield and Fresno – all in California – and Seattle.
What do you do as a buyer who’s up against multiple bids for every home you’re interested in buying? There are five rules of the road here:
1. Make your offer as solid as possible. If you know that your offer will be up against others, make things as simple as possible. Try to write an offer with all the standard fees paid or even better.
2. Get prequalified for a loan. Sellers will be more interested in talking to buyers they know will pull through with a loan. Show them by visiting a lender or mortgage professional before you start house hunting. Get prequalified for a loan and your offer will be much stronger.
3. Have as much downpayment and closing cash as you can. This is common sense, but worth noting. A higher downpayment these days will get you a much better loan and also will likely put you at the front of the bidding line above buyers with less cash on hand.
4. Be patient. You may not get the first house you fight for. It’s OK. Inventory may be tight, but there is a whole population of sellers out there who’ve been waiting to sell. They’re watching the market and will come around, creating more homes to choose from.
5. Choose the right Realtor. Make sure your Realtor who’s helped buyers buy homes in the area in recent months. The real estate market is always changing and Realtors can help you to understand the market in your area.
If you have any questions, please let me know.
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