How To Keep Cool In A Hot Market
Real Estate Competition in Dallas is Heating Up
The weather may be getting cooler, but the demand in Dallas’ housing market is just heating up. According to Realtor.com, Dallas was one of the hottest housing markets in August 2015 -- second to San Francisco. In fact, home prices are on the rise and inventory shrinks daily. This is great news if you’re selling your home, but what does this mean if you’re in the market to buy?
For first-time homebuyers and veteran buyers alike, navigating a seller’s market can seem daunting. Here are five essential tips and tricks to get your offer at the top of a seller’s list.
Want a quick and easy way to get your bid at the top of a seller’s list? Get a pre-qualification letter from a lender with a good reputation . Sellers generally prioritize offers from buyers who are pre-qualified over those who are not, and Realtors give input on the lender’s reputation.
As a buyer, getting pre-qualified gives you a range of how much you might be eligible to borrow. This is not a guaranteed amount, but can help you sort and search available properties on the market within your budget and gives you a powerful tool when it is time to make an offer, especially in a competitive market.
Have Documents Handy
Your mortgage lender will require several documents regarding your financial history. Gather these in advance and keep copies in a folder on hand.
Here’s a list of the financial documents you need:
- W-2 forms from the previous two years, if you collect a paycheck.
- Profit and loss statements or 1099 forms, if you own a business.
- The last three to six month’s paycheck stubs.
- Most recent federal tax return, and possibly the last two tax returns.
- A complete list of your debts, such as credit cards, student loans, car loans and child support payments, along with minimum monthly payments and balances.
- List of assets, including bank statements, mutual fund statements, real estate and automobile titles, brokerage statements and records of other investments or assets.
- Canceled checks for your rent or mortgage payments.
Buying AND Selling? Know that You May Sell Faster
A market that’s high in demand and low in inventory can be a gift and a curse if you’re buying and selling simultaneously. Since it is a seller’s market, remember that you may need to vacate your home for an approved buyer.
Consider your options for a transition period between homes. This might mean renting an apartment unit month to month until you find your next home.
In a highly competitive market, buyers can up the ante with offers over the seller’s asking price and market value. You might end up spending more than what the home was listed for because bidding wars happen often in a seller’s market.
If you’re approved for $150,000, look at homes in a price range that give you room to negotiate -- anywhere from $30,000 to $50,000.
Know When to Walk Away
Things can get emotional. Don’t get in the mental game of competing with other buyers just to win. Be mindful of your budget and keep your emotions in check during the negotiation process. It isn’t worth it to max out your budget, especially when a home in a more desireable area pops up.
To keep your stress level moderate during the home buying process, it’s essential to work with a reputable mortgage company and experienced real estate agent who can provide guidance, especially if you’re in the market for the first time.