By Geoff Ramsey, CRS, GRI
President, Greater Chattanooga Realtors®
The 2018 housing market in the Chattanooga region is going to continue to be challenging for buyers as the market remains strong and there simply isn’t enough inventory. Fact: it’s a seller’s market. There’s no point in sugar-coating it. Homes are selling on average within three weeks and often staying on the market less than 48 hours. However, that’s doesn’t mean it’s a bad time to buy.
The reality of the high cost to rent and the prospect of mortgage rates increasing has buyers continuing to flock to the market. It’s important for buyers to be a little flexible when assessing their must have’s and have not’s so to power through the competition and find a buy a home they’ll love. Follow these tips to be closer to owning the home you want.
Get a Realtor. The resources, experience, and skills of a Realtor are priceless when it comes to buying in a seller’s market. Every detail matters, especially in a hot, fast-moving market. Working with a Realtor can make all the difference and save buyers lots of time and stress. Using a Realtor can make all the difference and get your name at the top of the list because listing agents are often more apt to go with a buyer working with a Realtor that is reputable and can get the deal done efficiently, especially if their seller needs to turn around and purchase a home quickly after the sale.
Get preapproved. Even with a competitive market, some homeowners begin visiting homes without a mortgage approval letter from their lender. Fact: in this market, preapproval letters are key to a smooth homebuying process. Anyone can make an offer, but a true bonafide offer has either a preapproval letter or proof of funds documentation. A preapproval means a lender has examined your credit and other expenses to determine how much mortgage you could afford given their underwriting guidelines. Submitting an offer with only a prequalification letter could sink your bid in a hurry because prequalification only shows how much a house you could afford based on income. Submitting an offer with a preapproval shows you’re a serious buyer, ready and financially able to close the deal.
Be prepared to make strong, flexible offers. Have your Realtor ask for the seller’s preferred closing date. Your contract may very well be accepted simply because of your flexibility on timing. In a competitive seller’s market, your offer not only needs to be complete, it needs to be clean. And clean means no contingencies. Try your best to overlook cosmetic changes a home needs that you can fix after moving in. In addition, if everyone else is offering 10-day due-diligence periods, and you and your Realtor are confident it’s a great home, make your due-diligence just 5-days. Little things can make a big difference.
Gather your best down payment. Present an offer with the highest down payment that you could reasonable manage. Sellers are more likely to accept an offer from a buyer with a larger down payment for a variety of reasons, including the belief that a buyer with a larger down payment is going to more smoothly quality for a mortgage.
Be prepared to make a quick decision. Possibly the most difficult part of a seller’s market is having to make rush decisions. Buying a home is typically the largest investment you’ll ever make but moving quickly can mean the difference in whether you get that dream home. Most buyers are only able to view a home once before decision whether to make an offer. One way to make those decision easier is to determine your priorities ahead of time and share them with your Realtor.
Connect with a Realtor to get off on the right foot in your home search. They will provide more tips for how to navigate our housing market and go from potential buyer to new homeowner.