According to real estate website millionacres.com, the U.S. is currently experiencing a housing shortage. That should come as no surprise since home purchases and home prices have reached record levels all across the country.
What exactly is considered “low inventory” in a real estate market? It’s about a six-month housing supply at any one time. Let’s take Wilmington, North Carolina, for example. That means if no new homes enter the market, there should be enough Wilmington houses for sale to last six months. Anything less than that would be considered a housing shortage or a seller’s market.
If you’re looking at Wilmington homes, you may find yourself in this situation. Here are six tips to help you move quickly and strategically when it’s a seller’s market.
Get preapproved before househunting
To take advantage of a fast-moving house market and be competitive, you must be fully preapproved for a mortgage before you go househunting. Wilmington homes are going fast, so you need to be ready to buy if you come across the ideal home.
Some potential buyers forgo the process of being preapproved for a mortgage by only obtaining a prequalification. If you don’t have a preapproval for a loan, it signals to sellers that you’re not serious, and you will likely miss out on an opportunity to purchase your dream home if you do come across it.
You may also want to consider if you can afford a bit more mortgage than you originally budgeted for since you want the ability to ensure that your offer is competitive if you do end up in a bidding war for your dream home. Remember, low inventory means you will likely have to pay more than the house’s asking price.
Offer more money upfront
This brings us to our next point: offering more money upfront when submitting a bid on a house. Wilmington houses for sale, especially luxury homes, are likely receiving several offers. If you offer your best and final offer upfront, you’ll be more likely to show the seller how serious you are compared to others.
But make sure you can afford the mortgage before offering more. Alternatively, you can offer more earnest money upfront. Instead of going with the industry standard of $1,000, offer $10,000 and set yourself apart from other bidders.
Be flexible in your wants
In an ideal world, you could purchase your dream home with all the features exactly as you want them. However, most homes are not going to be your “perfect” home. Try to have a vision for how you can turn not-so-great properties into a dream home, especially in a tight housing market.
Start vetting design firms before going househunting so you can have a partner to help you turn your vision for a perfect home into reality as soon as you find a property that meets most of your wants and needs. This will also allow you to get a sense of how much money is needed to have some of your ideas come to fruition. Partnering with a design firm can also connect you with all necessary vendors, which takes a lot of stress out of the process.
In addition, be flexible in other areas, including closing dates, seller’s fees, closing costs, and by not asking for much in the way of repairs. By not being a demanding buyer, you will boost your chances of swiftly landing the deal on a home.
Be ready to move quickly if your offer is accepted
In a fast-paced real estate market, offers can be extended and accepted in a matter of hours. What you thought might be a one- or two-month process can turn into a two-week process, leaving you scrambling to pull together all of the necessary paperwork and funds.
Work with your realtor and loan officer to ensure you have all the requisite paperwork collected and saved in an organized manner so you can be fully prepared for closing. You should also have any money you plan to use to purchase the home in an established bank account. Now is not the time to make large purchases or transfer substantial sums of money in and out of your bank accounts.
Expand your geographical preferences
You may have an ideal neighborhood, like Wilmington, in mind, but the reality is, with a low-inventory real estate market, you may not get the opportunity to buy in your favorite neighborhoods. This is a part of being flexible in the homebuying process. If you modify your expectations and allow yourself to expand your geographical preferences, you’re much more likely to find a home.
Work with an experienced realtor
To be able to move quickly and find as much inventory as possible, work with an experienced realtor who serves a multitude of neighborhoods. A realtor will help you to write a compelling and competitive offer. They can offer the inside scoop on properties like Wilmington homes that may not have hit the market yet, show you properties that aren’t on popular listing sites like Zillow.com, and be an advisor throughout the process.
A realtor can also help you keep a clear head since purchasing a home in a tight real estate market can lead even the most savvy buyer into buying a property for way more than it’s worth. There may also be pressure for a buyer to purchase without considering major repairs, or the buyer may not have time to look into potentially major issues, especially if there are multiple competing offers on the table. Think of a realtor as a trusted advisor and expert professional who can make this stressful buying situation much smoother.
Ready to start looking for your first or next home and worried about the low inventory? Reach out to the knowledgeable team at The Carolina’s Finest for assistance.