While mortgage rates continue to remain historically low as we move into 2021, there is one problem that is hampering sales – there aren’t as many homes available on the market. According to the National Association of Realtors, housing inventory in the U.S. at the end of December 2020 was 1.07 million homes, the lowest number of homes since 1982. Part of the reason for the low inventory is seller uncertainty. Not that they won’t be able to sell, but not being sure they will find a home they can afford after they sell. Many potential sellers are waiting for more stable conditions before they list. So how can a buyer put themselves in the best position to find and purchase a house in a low inventory market? Here are five tips that can help:
- Get financially prepared. Do all you can ahead of time, so when you find the right house, you’re ready. Get a mortgage pre-approval, and have all the documentation needed ready so moving forward with a loan doesn’t hit any snags or roadblocks. Many banks like NASB have programs that will take you through the underwriting process so that when you’re ready to purchase, the loan will be nearly complete, giving you an advantage over other buyers and the ability to close faster. Also, make sure you have a solid financial footing; you have the income and money saved to make a down payment and the required monthly payments.
- Look at homes that have been on the market for a while. Even if they are priced a bit out of your range, the chances are good this house is priced a little too high for the neighborhood. Have your realtor make an offer that is more within your budget range. The sellers may accept if they are getting desperate to sell.
- Write a personal letter to the seller. Along with your offer, write a personal letter to the seller that explains why you want the house, along with complimenting them on how well they’ve furnished and taken care of it. A connection to a home is a personal one so let them know how much you like it and will take care of it.
- Work with a professional, full-time realtor. The right realtor can make all the difference when purchasing in a low inventory market. They have access to thousands of listings on the multiple listing service (MLS), as well as hearing about listings from other agents before they hit the MLS. And they will have the experience to negotiate in your favor.
- Be patient. The right home listed at the right time will happen, but you have to have patience and be ready at a moment’s notice to make an offer. Be flexible when you can view a home - after work, during lunch, on the weekend, and be prepared to make an offer if it’s the right one.
Being proactive and prepared when inventory is low can make all the difference between getting your dream house and losing it to someone else. If you need help securing a loan or would like more information on our Home Buying Advantage program, click here or give the experts at NASB a call at 855-465-0753.