Spring is right around the corner, literally. And with it comes more homes on the market and more home buyers. This means it will probably be a pretty competitive market over the next few months. While there’s not a lot of competition in the higher end market base, many buyers are finding bidding wars going on, especially for homes under $1 million. If you’re looking to prepare yourself for the home buying season here are four simple tips.
#1. Make sure you qualify for a mortgage unless you are buying with cash.
In order to get a mortgage, lenders need to know that you’ll be able to meet the monthly mortgage payment. It’s important to be pre-approved for a loan before looking at homes so that you know your price range and you stay within your budget. Lenders will ask a lot of questions during the application process and they’ll need to know your employment history, income, any accounts, debts, investments, and liabilities. They will need to check your credit history and score to see if you are a low-risk applicant for a mortgage.
#2.Understand your own finances.
Again, if you’re planning on paying for the house in cash, you won’t need a mortgage but you still need to understand your finances, credit ratings, and make sure you can afford the home. Make sure there are no errors or mistakes on your credit report and pay off any delinquent bills to increase your score and lower your debt to income ratio.
#3. Get a Realtor® that understands the market.
An experienced agent will understand the micro markets of individual neighborhoods and communities throughout the city in which you want to buy. This is crucial to offering the right amount on a home, negotiating with the sellers, and making sure you get the best deal and terms possible. Real estate agents that don’t understand the market or their area tend to pay more for homes, do a disservice to their buyers, and can actually lose out on the home the buyers really want. It is essential to use an experienced a local agent that works full time to get you the right home at the right price.
#4. Understand the home prices.
Home prices across the country are at an all-time high according to the National Association of Realtors February 2018 report. Sellers are getting up to at least 95% of their asking price if not more. Be prepared to pay those prices if you want that home. This is not the time to lowball a seller. In many cases, competitively priced homes are seeing bidding wars increasing the sale price of the home exponentially. Especially in California, home prices are much more inflated but remember, you can only get a mortgage for as much as the home will appraise for. Lenders won’t loan money on an overpriced home. You’ll need to make up the difference if you plan on offering more than asking price or more than the appraisal.
Again, having a qualified, experienced, and local Realtor® on your side throughout the process can help you find the right house, for the right terms, and the right price. Contact David Watkins today for local Calabasas real estate information.