Like most of the nation, Chattanooga is a seller's market. Inventory is low, prices are rising, and demand is still high. That means home buyers are on the lookout for the perfect home. And when it comes around, competition from other buyers can be fierce. Multiple offers, a bidding war, higher selling price…
To get the right home for the right price, smart buyers in a seller's market need to be ready to roll as soon as the ideal home hits the market.
10 essentials for smart buyers in a seller's market
Follow these 10 must-do steps when you're looking for a home. They'll help you find the right one – and give you a good shot at getting it.
1. Get Pre-Approved, Not Just Pre-Qualified
You may already be planning to get pre-qualified. But you really should take the next step and get pre-approved. It's the smart choice, and not just because it's a seller's market.
Here's the difference: pre-qualification is really just a check to see if you have good enough credit to get approved. Pre-approval means you've given your mortgage lender all the paperwork they need to verify that you qualify for a loan of the size you need to buy a home.
When you make an offer on a home, including a pre-approval letter can show the seller you mean business and have the means to follow through.
2. Find the Best Realtor
When competition for desirable homes is high, your offer is crucially important. A smart agent will ask the right questions and take the strongest negotiating position possible. The best realtor will let you know if you need to make a higher offer than usual based on interest or the potential of multiple offers. The last thing you want to do is low-ball a seller who has options.
3. Do Your Homework
When you're already looking to move to a specific neighborhood or type of home, ask your agent to help you find recent sales comparable to the home you're hoping to buy. You'll know more at the beginning of the process. And you'll be able to make a more informed offer.
Before you decide on a neighborhood or make an offer, spend some time in the area. You'll want to watch the block during different times of day to make sure the community meshes with your lifestyle.
4. Know What You Need (and Want)
When perfect homes are common, it's easier to find one that has everything you want. But in a seller's market, need is greater than want. So focus on what you need. Location, condition, square footage, and amenities probably don't fall in the "need" category, so be flexible on those. But when a home comes up that ticks all the "need" boxes, give it a look right away.
5. Make a Firm Budget
Stay within – even a bit below – your price range. Don't even bother looking higher, since a seller's market makes it highly unlikely that the seller will settle for a low offer. Your agent may even counsel you to offer full price. Just don't let a bidding war cripple you financially!
6. Be Ready to Flex
Your offer will look very attractive if you can close when the seller prefers. A good agent will find out what the seller needs and guide you to offer a particular closing timeframe. Whether they're in a hurry or need more time to move out, win bonus points by being flexible.
7. Look Beneath the Surface
Perfect homes disappear in a flash in a seller's market. But if you're game to fix small problems or freshen up a home's look, you just might find the home you want at a market-beating price. Look for potential. Paint is cheap (and easy to do before you move in), light fixtures can be changed out, landscaping can be added. And, if you save enough on the selling price, you may even be able to do more expensive updates like flooring or a new kitchen. You likely won't get in a bidding war over a fixer-upper.
8. Listen to Your Gut
Many people – especially those who are buying a home for the first time – think that they will lose their earnest money if they make an offer and end up learning things that concern them about the house. That's not the case. You'll get your earnest money back if the contract is cancelled before the due diligence deadline.
If you view a home and fall in love with it, go ahead and offer! You'll be able to get inspections done, consider costs for public utilities, and keep your eyes open for other homes you might like better.
9. Don't Settle
If you lose out on a home you were bidding on, don't settle for next best. Remember point #4, and look for a home that meets all your needs (and some of your wants). Just don't compromise on the needs. Your home is a long-term investment, and you'll be there for a while. Unless you really love it, you may end up feeling trapped.
10. Tell Your Story
In this competitive market, a little personality goes a long way. If you want to get in the seller's good graces, write a letter! Your agent can attach it to your offer. Talk about what you love about the home, how you can see all the care they put into it, why you picture yourself enjoying it for many years. Be kind, be honest, and be optimistic.
Even when the market is less competitive, buying can be stressful. But a seller's market brings out even more stress. Sellers have it easy – all they have to do is get a good realtor, wait a minute, and their home will sell. Buyers, on the other hand, need more than patience. They need persistence.
But what's better than persistence? Strategy. By following the steps outlined above, and hiring the most knowledgeable agent, you can take an advantage over your competition. Don't get discouraged – you're going about it the right way.