How Can Homebuyers Navigate Their Way Through A Competitive Housing Market?

Monday, 4 October 2021, 6:30 am
Press Release: Kalkine

Summary

• In a competitive housing market, more people are willing to purchase a property than houses available for sale.
• Vigilant and smart buyers should stand out from a crowd of prospective home buyers to lock in a suitable deal with a seller.
• Being quick, mindful, and well aware of one’s priorities are key qualities that can help buyers in their quest to find a property.

No doubt, the housing market seems to be becoming cold and unwelcoming for first home buyers, especially given the skyrocketing prices seen across the sector. However, the pandemic has strained an already drenched housing supply, wreaking havoc in a market flocked with property investors. Booming housing demand has further created upward pressure on the market. In the given scenario, many buyers seem to have been locked in a sellers’ market, with little legroom for negotiation.

The unsatiated demand for housing has created a discrepancy in the demand-supply dynamics of the property sector. Essentially, this means that more people are willing to purchase a property than houses available for sale, strengthening the seller’s market.

It has become challenging for first-time property buyers to compete with investors and wealthy house buyers who seem to be dominating the space. However, even novice buyers can manage their way out of this turmoil by staying vigilant and taking care of some essential aspects.

Given this backdrop, let us discuss some important tips that can help potential buyers navigate through a competitive housing market:

Make quick yet mindful decisions

While entering a market flocked with buyers, it is imperative for potential buyers to take quick action while jumping in the market as soon as possible. However, it is also important to ensure that such decisions are mindful and made after proper fundamental and technical research of the market.

As most properties do not remain vacant for long, it might be a bad idea to stretch for a long while making a buying decision. Buyers may lose out on a lucrative opportunity if they keep waiting for long. Instead, they should at least begin with a standard procedure of buying a property.

These steps include finding the perfect property, doing due diligence, taking care of finances, and carrying out an appropriate search to figure out property reports, offer due dates, etc. Once you have the relevant information in hand, buyers can set up a meeting with their agents to conduct a house tour. This will offer them a better perspective on the decision to buy the house.

Get a pre-approved mortgage

Getting a pre-approval for a housing loan is perhaps the most essential step in ensuring that your finances are in check. Finding the perfect house and then being unable to finance it can be quite disheartening.

To secure a pre-approval, the lender would first examine the buyer’s budget and credit history. Buyers might have to present their most recent payslips or financial statements from the bank to ensure their financial footing. Additionally, the lender may also look at how much money the person has been spending over the last few years before approving the loan. Thus, it is good to keep your expenses in check in case you are planning to buy the property.

The objective of the lender is to secure its chances of receiving the lent amount from the borrower. While a pre-approval is a one-stop solution, one can only earn it with a solid financial track record.

List out what is necessary and what is negotiable

Finding a house is by no means an easy task, and it often comes with a great deal of compromise on some front. However, with a proper vision of the desired home, you can easily distinguish the areas that are negotiable and that are necessary.

One can start by making a list of essential requirements from the desired property while also listing the requirements that can be compromised. Such a process ensures that the buyer need not sacrifice any necessary aspect even if he gets an exciting price for the property.

Save up enough to pay earnest money

Earnest money is a quick and reliable way to secure a property, which involves paying a small chunk of the total house price by the buyer to the seller. Earnest money builds a sense of trust among the buyer and seller by ensuring the occurrence of a transaction.

Earnest money is typically around 1-3 per cent of the total property price. Once this payment is made, the seller must remove his house from the market and close the deal with the intended buyer. Paying earnest money is mandatory in all housing transactions. However, the earlier you pay it, the quicker you can finalise a deal.

Make it easier for the seller

Often, human connections help guide us in a quest for something we really want. It is important to remember that the seller is also a human like a buyer, even when the market conditions seem daunting and intimidating.

Being vocal about your requirements and keeping your needs straightforward and direct can be a good way to establish a solid foundation for your relationship with the seller. Buyers can also embrace different ways to build a connection, including writing a letter to the seller, offering to rent back the house after the deal is closed and being flexible with their wants.

All in all, buying a house in a competitive market requires you to stand out among a pack of property hungry buyers. Buyers can adopt different strategies and methods to stay ahead of the curve and find a property that best suits them. In a way, buying in a seller’s market can be challenging but not an impossible task.

GOOD READ: 10 tips for buying your first house

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