7 Steps to Being the Most Attractive Homebuyer

7 Steps to Being the Most Attractive Homebuyer

In today’s real estate climate, people are buying homes almost as soon as they’re put on the market. Realtor.com[i] predicts that 2021 will continue the trend of high home prices and stiff competition between buyers.

As exciting as homebuying is, it can be difficult to snatch up your dream home with so many others making offers. Before you look for your new home, read these seven ways you can make yourself stand out amongst other homebuyers.

Plan Ahead

It’s typically a good idea to start planning your move four months before you buy. Be sure to check your credit score, avoid making any big purchases, and try not to take on any big debt. Debt lowers your credit score and increases your debt-to-income ratio, which are two key areas that banks, mortgage companies, and other financial institutions look at before preapproving you for a loan. If your debt-to-income ratio is too high, try your best to pay off as much debt as you can before starting your home search.

Set Your Home Price

As tempting as it may be, don’t look at a $300,000 house if you can only afford up to $250,000. With a lower supply of homes on the market, you will likely run into some difficult competition and there is a strong chance that any home you’re interested in will have multiple offers. Getting a preapproval and discussing your options with a mortgage advisor can help you plan a budget for your future home.

When you do spot a great deal on a house, jump on that opportunity. Because houses are selling so quickly, you should learn how to spot a great deal by researching an area’s home prices. Doing your research beforehand will help you and your realtor negotiate and could prevent you from overpaying for a house.

Know that Cash is King

The more cash you have, the more appealing you are as a buyer. Sellers will feel more comfortable if you are able to put down at least 20% of a mortgage—this makes you look financially stable and responsible. Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal.

Get Preapproved and Prequalified Before Your Search

Getting preapproved requires you to fill out a mortgage application to determine your creditworthiness, whereas getting prequalified gives you an idea of what you can afford and helps to streamline your search. If you’re financing your house with a mortgage, have a preapproval letter with you, and if you’re paying cash, have proof of funds. Getting preapproved will also help you compete with an all-cash buyer.

Limit Your Contingencies

It’s recommended that you don’t let your ability to buy a home depend on you meeting a bunch of requirements beforehand. That is to say, if you have to wait to sell the house you’re currently living in before you can afford the house you want to buy, it might be a smart idea to temporarily rent or stay with friends or family. However, some contingencies (such as getting an appraisal or home inspection) are standard.

Add a Personal Touch

In the same way you should write a personalized cover letter for a job you want, consider writing a letter to the sellers of the house. This can show them that you care about the home on a personal level and don’t just care about numbers.

Be Flexible with Closing Dates

While you might be eager to move in right away, try to play it cool when it comes to settling on a closing date. Be patient when talking to the seller—find out when their ideal close date is, and then try to match that date as best as you can.

[i] https://www.realtor.com/research/2021-national-housing-forecast/


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Step 1: Plan Your Home Buying Budget

You do need a few items readily available before you start contacting lenders about a mortgage. Having these things up front will make the process easier and less stressful.

Step 2: Get Mortgage Preapproval

Both the approval process, and the rates available are very subjective. What might have been a factor in your friend’s mortgage approval or the rates they received might not affect your approval or rates, and vice versa.

a couple sit in the kitchen of a show home and discuss some figures with the estate agent or mortgage advisor

Step 4: Closing on your new home

Your comprehensive guide to what to expect when buying a home: who you’ll work with, what timeline to expect, and what you’ll need to do to ensure the process runs smoothly.

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