The real estate market will favor the buyer or the seller as trends change over time. When there is too much inventory up for sale and not many buyers, the buyer is the one that has the advantage with all the homes to pick from. When homes for sale are limited with too many buyers, the sellers have the advantage. A seller's market can potentially cause a buyer to make these 3 mistakes.
Making An Impulse Purchase
Homes for sale may be limited, but you shouldn't feel the need to act on an impulse. After all, it can be frustrating to see homes go up for sale just as fast as they come down. You should always take time to view the home and decide if you really want it. If the stress of having multiple buyers with offers is too much for you to handle, consider waiting until the market cools down. You could also contact some real estate services in your area and have a professional help you so you aren't as stressed.
You do not want to make the mistake of purchasing a home you are not in love with. If it is not the home for you, then you'll end up losing money by needing to sell the home too soon.
Not Having Your Pre-approval Ready
It is always a good idea to have a mortgage pre-approval ready to go, even if you are casually looking. The application process can take several days, and in a hot real estate market, the home you want may be gone by the time you get your pre-approval in order.
Sellers will be looking for reasons to eliminate buyers if there are multiple offers on the home. For instance, a cash offer may be viewed more favorably than one that requires financing, because the mortgage can fall through.
Not having a pre-approval pushes you further down the priority list of sellers with offers. You may offer the seller more money than another buyer, but if you cannot borrow enough cash to cover the purchase, the seller loses money by having to put the home back on the market. A pre-approval tells the seller that you can get a mortgage for the amount you are offering.
Buying A Home That's Too Expensive
It is important that you pick a budget for your home purchase and stick to it. Chances are that your loan pre-approval amount will be for much more than you are comfortable paying. Don't use the pre-approval amount to determine the upper end of your home budget, since it may be too high. Decide on a budget of how much you can afford and stick to it, even if it means passing up on houses.Share