The real estate is difficult to navigate—especially for first-time buyers. More often than not, there’s a knowledge gap between you and realtors, property managers, and other industry professionals. Seller’s markets—where demand is high—can only widen the gap.
But you can bridge the gap quickly with some research. West Virginia’s Huntington Herald-Dispatch recently provided three home-buying tips:
1. Get mortgage preapproval. Sellers’ markets typically feature low inventory, which can make the buying process very competitive. Prospective buyers who do not have a mortgage pre-approval letter in hand when making offers may find themselves losing out on their dream homes to fellow buyers who have gotten pre-approval from a lending institution. Sellers may be impatient with buyers who have not yet been preapproved for a mortgage, even accepting a lesser offer from buyers who are ready to begin transactions immediately. The preapproval process is relatively quick and simple, so buyers should not hesitate to apply.
2. Stick to your budget. Lenders will indicate to prospective buyers how much they’re willing to lend them, and that figure is typically considerably more than buyers are willing to borrow. In a seller’s market, bidding wars can quickly drive up prices, but buyers should stick to their budgets so they are not house-poor after buying. Sticking to a budget can be difficult in a seller’s market, but such patience will likely pay off in the long run.
3. Be ready to compromise. Unless they have unlimited budgets, buyers often must compromise when purchasing a home. That’s especially true in a seller’s market with limited inventory. Buyers who need to buy a home must identify their needs versus their wants and recognize the likelihood that they will have to compromise.
Last, but not least: Find the right realtor. While real estate agents are self-interested, they can help guide you through the home-buying process. Don’t hesitate to ask for help from an experienced (and trustworthy) realtor.