According to the National Association of Realtors, this year the number of existing-home sales was expected to increase about 3.5%, to 5.64 million. The NAR predicts that existing-home purchases will rise another 2.8% in 2018, to 5.8 million.(1)
With homes continuing to fly off the market, buyers might have to compromise slightly on their list of “must-haves,” like favorite neighborhood, commute time, price, and size of home. If you’re planning to buy a new home in 2018, give yourself a competitive advantage with the following tips:
Get your financing in order. Of course, Dave recommends the 100% down plan, but many can’t pay cash for their home. If you’re looking to finance, get pre-approved for a 15-year fixed-rate mortgage. When sellers review your offer, a pre-approval will show them you’re a serious buyer because you and your lender have already started the mortgage process.
Save a competitive down payment. Plan to put at least 10% down on your new home at closing. However, 20% is even better because you’ll avoid paying private mortgage insurance (PMI). The more you can put down, the less money you’ll need to finance—and that adds up to a lower mortgage payment each month. Plus, the more money you bring to the table, the more serious you look to the seller. So, bring on the cash! Know what you want in a home. Knowing what you want in a home is half the battle in finding the right place. If you’re buying a home with your spouse, make separate lists of must-haves and compare. Once you’re on the same page about what you’re looking for, share the list with your real estate agent and use those criteria as the foundation of your home search. You’ll be able to move faster with an offer once you find the house that meets most—if not all—of your requirements.
Include a personal letter with your offer. Nashville couple Abby and John B. said they believe this move is the reason their offer beat the stiff competition. “We sent the sellers a personal letter with our offer,” Abby said. “The best thing you can do is to include in the letter things you love about their house. If they have a deck or screened-in porch, tell them how you envision using the space. We did that and the sellers accepted our offer—out of multiple offers—within 24 hours.”
Hire the best agent possible. In a hot market, your agent could make or break a deal. You’ll want a seasoned agent who has a great reputation in the real estate community. The right agent will answer questions you didn’t even know you had about the buying process. You’ll need an expert negotiator who also knows how to manage the details of paperwork and closing, so stick with a pro. After all, your home is likely your biggest financial asset so you’ll want to make the most of your investment.
