A hot market is great for sellers as home buyers are flocking to make a purchase as prices are being driven up. So what is it like for home buyers in this type of market? In one word: difficult.
It can be extremely hard to for home buyers to navigate a seller’s market. Many buyers buckle under the pressure and make bad decisions.
Below are five key mistakes home buyers make (but shouldn’t).
A buyer that is thinking that they will never find the right house, never be able to land a deal on the right house, and keeps seeing houses fly off the market before they can do a walk-through starts to feel panicked. At this point, many home buyers start throwing offers at any house that is standing. The hope is that something lands and they will deal with the outcome later.
This is the worst way to approach house buying. Even in a hot market, home buyers can still get what they want out of a house. It may take a little bit longer than in other areas, but they should not throw away their chances of having the house they want.
Many home buyers will make too high of offers or buy a house that they hate. Take a step back and breathe. Always keep in mind that it will be more of a hassle down the road when trying to make those massive payments or selling a house that is not a good fit for the owner.
Every home buyer has at least one instance of this problem. They are in love with a house but they are not sure about making an offer. This is a problem many first-time home buyers run into. They are nervous about making an offer on a house, even if it seems great.
If a buyer stalls on making an offer, someone else is going to make one. The regret of seeing a house sold that could have been the one can be painful. However, it is also a great teaching moment.
If a buyer has not been approved for a loan, they need to start the process. Having the ability to make an offer if the house is great will make the process much smoother.
Following market trends is important. Knowing what houses are being sold, for how much, and how quickly can help a buyer know what to expect. However, too much obsession with the market can drive anyone crazy and no buyer has to purchase a home that is on trend at the time.
So many potential home buyers believe they have more buying power than they do. They have estimated their expenses and income and are confident in what they can purchase. However, many people are very disappointed when they get approved for a loan and find it it is much less than they expected.
Getting pre-approved is the smart way to go. If looking at houses before a pre-approval it is always better to look low. It is easy to look at more expensive houses if the budget allows for it once the mortgage is approved. But it is much harder to look at a cheaper house once the expensive ones are in the back of a buyer’s mind.
While every seller’s dream is a bidding war, a home buyer needs to steer clear of this situation. A house that has all of the right features, is in a great neighborhood, and within their price range can be tempting to make multiple offers on. If there are many buyers trying to purchase the same house the offers can quickly get out of hand.
Avoid bidding wars because you can quickly find yourself in over your head. In some cases, the price is overinflated and not worth the investment. Many times there is a similar house available that can be purchased at a much lower price.
A buyer trying to navigate the rough world of a hot real estate market is bound to make mistakes. In the real estate world, these mistakes can cost them thousands of dollars. Home buyers that are working in a hot market should remember these five situations they may see. If they are more aware of their situation they may be able to avoid losing out on a large sum of money.