Buying in a Tough Market Guide

Buying in a Tough Market

Buying your dream home for a reasonable price can be a bit of a tightrope walk. If you bid too low, you risk losing the property to rival bidders. If you bid too high, you eat up more and more of your budget. Here are a few tips on how to buy the home you want, for a price close to what you’d like to pay.

  1. Be prepared to decide. It is essential that you are prepared. Know what you want, as well as what you need, from a prospective property. That way, you are ready with a timely offer as soon as you locate the property that is right for you.
  2. Stay on top. Keep abreast of developments in the local real estate market. Your chosen real estate agent or buyer’s representative can work with you to ensure you are on top, whenever a new listing hits the market. If a new property becomes available, do whatever you can (within reason) to be available for viewings.
  3. Prequalify your mortgage. Sellers will tend to be more comfortable negotiating with an individual who can prove their dedication, in both intent and ability, to purchasing their home.
  4. Contingencies. Try to secure a mortgage contingency for yourself. Aside from that, try and limit contingencies to those that are strictly necessary, for your financial situation or peace of mind. Any hurdle or restriction to a sale (delaying closing to a specific date, selling your current home prior to moving, etc) can turn an otherwise excellent offer into a debatable one.
  5. Offers. Before making an offer, make sure you (or you and your agent) have compiled all relevant data for the property. When you’re ready to make the offer, be sensible as well as aggressive. Too aggressive (and too low) and you may offend the seller or lose out to another interested buyer. You don’t have to bid your ceiling immediately. Be intelligent.
  6. Beware buyer’s frenzy. Don’t get caught up in the competition of bidding. It’s not that sort of contest, and the highest bidder doesn’t necessarily “win.” Not if winning costs you more than you’re willing to spend.
  7. Don’t skimp on inspections. Home inspections may cost you part of your budget, but they’ll save you money in the long run. You want to ensure that your potential investment is a sound one.