If you’re new to home buying or are just inexperienced, you might easily make some mistakes when purchasing real estate. Qualified, experienced agents like ours at Barrett Sotheby’s International Realty can make your homeownership dreams a reality. Together, we help you navigate the murky waters of buying a home in a market where supply can’t meet demand. Here are five home buyer mistakes to avoid in a seller's market.
Not Getting Pre-Approved for a Loan
Pre-approval for a loan is the gateway to owning your own home with the help of lenders, but some prospective homeowners fail to check this off the list. While it’s important to note that getting pre-qualified is the first step toward securing a loan, being pre-approved means that the lender is ready and willing to offer you the amount they agreed to during your pre-qualification phase. Completing the pre-approval process and securing these funds means you act more quickly. In a seller’s market, your timing could be the difference between getting the home you want or missing out.
Making Poor Decisions Out of Desperation
A seller’s market can be extremely stressful. There are fewer homes than people looking to purchase them and some homes will go from “new listing” to “under contract” in a matter of days—even hours at times. If you find yourself needing to move immediately due to a new job or even just a desire to live in a different neighborhood, you might also find yourself making decisions that are not wise for your situation. Waiving inspections and appraisals and agreeing to unreasonable closing deadlines are just some of the poor decisions you can make if you’re too desperate to secure a home. Although you need to act fast in a seller’s market, you should never compromise the home buying process—protect your investment by following through with these important steps along the way.
Overpaying and Failing to Stick to a Budget
In a seller’s market, it can be tempting to get into bidding wars with other home buyers—it’s almost impossible to avoid—where you throw your budget out of the window. Making offers that are too high above the asking price is a common mistake, and it’s made even trickier because low-ball offers in a seller’s market can easily cause you to be outbid. The risk of losing out on a home you really want or need can lead many to go above budget and ultimately pay the price later when the market tanks. When it comes to making an offer, trusting your agent to help you choose the most reasonable offer and navigate the bidding process is essential.
Hesitating to Make a Decision
On the other hand, when you fail to make decisions quickly in a seller’s market this often spells disappointment. It is still crucial to make a fair offer and to conduct all inspections and appraisals as you would in a more normal market, but indecision when it comes to selecting a home and other stages of the process can ensure that you don’t get the home of your dreams. Some home buyers may believe that they have time to wait for something better to come along or to get more information about the home or neighborhood. Making an informed decision is certainly a positive thing, but if you have fallen in love with a home while the market is hot then it can be detrimental to hold off on making an offer. It also kicks off the process and gives you time to find out everything you need to know about the home while you wait to go under contract.
Choosing an Inexperienced Realtor
Selecting an experienced and knowledgeable realtor who acts in your best interest is critical to the home buying process and can make or break your success. Realtors that are newly licensed or unfamiliar with the area, who are inexperienced in negotiating, or even the few who just want to make a quick buck, will probably not be able to get you the best deal—already difficult in a seller’s market—or make sure you’re taken care of in the process. Experienced agents like ours know the ins and outs—and ups and downs—of the home buying process, which will save you time and money. With little of that to spare in a difficult seller’s market, choose a Barrett Sotheby’s International Realty agent before you start the search for your next dream home.
If you’re thinking about buying a home in the Greater Boston area, Barrett Sotheby’s International Realty can help you navigate the current market and secure the home you want. Contact us today to find out more!