Tips For Buying A Home In A Hot Market

Buying a new home is work in and of itself. Buying a new home in a particularly hot market is that much more of a challenge.

Here are some tips to make your search for a new home of your own a success.

What You Need Before You Get Started

You need to understand what you are looking for in the first place. Meet with your family, partner, or yourself and establish some sort of criteria. Rank your criteria, if possible. This will save you time.

Then, you’ll have to locate a good agent. A good agent knows the neighborhood and legalities of the home buying process. The agent represents your interests in any deal. Negotiating through a realtor guarantees you'll get the best deal available. Collect referrals from friends or other people in your network that can connect you to a good agent. This can save you big bucks, including legal costs and costly administrative errors.

Get Your Finances In Order

This will give you a clear understanding of what you qualify for.

First, you must find your credit score. If your credit score isn't optimal, you can boost your score. Eliminate as many debts as possible and improve your payment history on existing obligations. The higher the credit score, the better your mortgage terms.

Your income isn't the sole factor in determining what you can afford. Your debt, after-tax income, interest rate, income sources, and credit card limit all determine your capacity to manage a monthly mortgage.

If possible, get pre-approved for your mortgage. It’s an essential step in determining what type of a house you can afford. Be sure to save up enough money for closing costs, inspections, and home insurance.

Buying Tactics

Once you have narrowed down your selection, you must act quickly. The sooner you act, the less likely you are to miss out on an opportunity.

Paying in cash is a good tactic in home buying; it will give you a good chance of closing fast. If you're able to pay for a home in cash, you can bypass a lot of the bureaucratic steps. You won't have to deal with a mortgage broker or address major credit score challenges. Cash gives you even more room to negotiate the selling price for the property.

If you can’t pay with cash, consider placing a higher bid. An escalation clause in the contract will give your realtor the option of submitting a bid approximately $5,000 more than the highest bid. Preparing for a potential bidding war is always recommended. In a hot market, an escalation clause is extremely beneficial.

Buying a new home in a hot market takes a lot of preparation. Armed with the right expertise, financial resources, and tactics you prepare yourself for success in buying your home.