5 Tips for Purchasing a Home in a Seller’s Market

Purchasing a home in a seller’s market doesn’t have to be challenging. Some preparation and strategy may give you an advantage over other potential buyers and increase your chances of having your offer accepted by a seller.

1. Get prequalified. Determine your loan options and obtain a pre-qualification letter from a lender prior to beginning the home search. Some homes go under contract within days, if not hours, so being able to move quickly with financing is a significant plus. The letter gives you an idea of how much home you can afford – so you can easily eliminate homes not in your price range – and lets sellers know you have been vetted financially. Remember, being pre-qualified does not guarantee a mortgage, and no loan is one-size-fits-all. Work closely with your Motto Mortgage loan originator to examine competitive quotes from lenders.
2. Be ready to close as quickly as the seller requires. A seller wanting to close within 30 days may not be interested in an offer from a buyer who also has a home to sell prior to closing on a new one.
3. Offer more earnest money. Earnest money, typically 1 to 5 percent of a purchase price that eventually gets credited towards your down payment, is held in escrow until your sale closes. By offering more earnest money, you’re letting the seller know that you’re a committed buyer.
4. Make your best offer. In a seller’s market, you probably won’t be able to present an offer that’s below the asking price. If you love the property, present the seller with your best offer price.
5. Include an escalation clause. If you want your offer to compete with multiple offers, consider having your real estate agent include an escalation clause. The clause details how much you’re willing to pay over competing offers. Including an escalation clause in your offer is another way to show a seller that you’re a serious buyer. When offering an escalation, make sure you work within your budget and your loan prequalification limits.

Still not sure how to navigate the financials of the current housing market as a buyer? Experienced loan originators in the Motto Mortgage network are ready to help make your homeownership dream a reality. It’s what they do best.

Find an independently owned Motto Mortgage office near you at www.mottomortgage.com.

* Source: MMR Strategy Group study of unaided awareness