How to Buy a Home in a Booming Housing Market

While we may not yet be in a full-blown seller’s market, the real estate industry is experiencing signs of change—lower inventory, higher prices and multiple offers. As a buyer, the process of buying a home can be challenging. According to Lawrence Yun, chief economist at the National Association of Realtors^®, “The forecast for home sales [in 2019] will be very boring—meaning stable.” So, while you don’t need to worry about soaring home prices in the near future, they are certainly inching upwards. When you find your dream home, anything you can do to look more attractive to the seller will be a plus for you — in any market! Here are some tips to look your best:

Come in with your best offer
When housing prices are on the rise, most sellers won't settle for anything below asking price. While coming in low can be a good strategy in a buyer's market, it won't help you when there's a shortage of inventory. Look at your finances, speak with your realtor and come in with your strongest offer up-front. First-time homebuyer? Check to see if your state or financial institutions near you have a first-time home buyer program—these can often help you be more competitive in the market, even without a cash offer.

Get preapproved for a home loan
In a competitive marketplace, experts recommend getting preapproved for a home loan before you make an offer. “Preapproval shows how much a lender is willing to give and helps you stand out in a sea of offers,” says Amy Moser, vice president of mortgage services at Mountain America Credit Union. “Letting sellers know you’re already approved can bump you to the top of the stack.” The good news? Current mortgage rates are still favorable to buyers.

Don't nitpick
This is not the time to get picky about decor or minor home repair issues. An inspection could help you determine whether the home is worth the seller's asking price, but any minor repairs should be factored into your budget. It will be much easier—and probably cheaper—to replace hideous wallpaper or outdated fixtures than make them part of your offer contingencies.

Get personal
Getting a little personal with the seller is an easy way to nudge your offer onto the top of their list. Let them know how much your partner will love what the seller has done with the kitchen or that you can't wait to see your kids play in the backyard. This is an authentic way to let them know you're a serious buyer.

Shop government foreclosures
Finally, if you're buying in a seller's market and you want a deal, check into government foreclosure properties. Start with the government-run websites that feature foreclosure houses, like the VA, USDA, FHA, Fannie Mae and Freddie Mac. These properties may require a bit more fixing-up, but you'll likely pay less in the long run. If you’re handy, or have a close friend that is, this could save you thousands!

Buying a home is likely the largest purchase you’ll ever make. So, when you’re ready, choose the mortgage professionals at Mountain America Credit Union—we’re committed to moving you toward all your financial dreams!

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