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Seven Tips for Buying a Home in a Hot Market

Updated: Feb 26, 2021

It's not news to say the we're in the midst of historically low inventory and interest rates while facing unprecedented demand for housing. For those interested in purchasing soon, the situation is likely to be challenging and can be downright frustrating. Using the word "hot" implies that there's a sense of urgency and high-pressure in the marketplace so I rarely use, it sounds like a sales pitch. On the other hand, it does seem to apply right now in virtually every price range in Reno & Sparks, I hope this helps.

1. Don’t get pre-qualified, get pre-approved. A pre-qualification is based on a credit check, while a pre-approval means the lender has verified the income and assets of the buyer. That additional step shows the seller that the buyer is serious and could put that buyer at the head of the line in a multiple-offer situation. I recommend that you choose a very responsive, local lender. This is no time for waiting on a call or email from across the country.

2. Know the market. In a seller’s market with rising prices, desirable homes are often snapped up within a day or two of listing, leaving those who “need some time to think” out in the cold. The time to do the thinking is before the house comes on the market, so the buyer is prepared when the ideal house is listed. Know the area(s) that you are interested in, so that you are comfortable when you find a good one. Ask your agent to review recent closed sales data as well as homes currently under contract. How much have prices moved in the past 90 days? Are selling prices higher than asking prices in the neighborhood? How many days (sometimes hours) from list to contract? This research will allow you to make informed choices when forced to make quick decisions.

3. Don’t wait for the weekend. Most agents have a system available that will notify buyers of new listings the moment they hit the MLS. Your ability to get out and look at homes quickly is advantageous. Your agent should be equally responsive and flexible.

4. Reputation matters. Find an agent (and lender) known for being hard-working, knowledgeable and trustworthy with excellent follow-through. This may add some credibility to your offer in a multiple-offer situation. Additionally, experienced agents with a collaborative approach will have good questions for the listing agent which will help the buyer be better-informed when writing an offer. Trust between agent and client is paramount right now as many out-of-town buyers are compelled to submit offers prior to seeing the home. This may sound crazy but it is happening.

5. New advances in technology help speed things along. Tech-savvy agents capable of managing the transaction with remote signatures, delivery, and online meeting platforms can save buyers precious time, getting the job done and submitted quickly. The ability to create and submit your offer within a few hours can make or break the deal in some cases.

6. If it seems like the right house, be prepared to offer full price… or more. When you find yourself in a multiple offer position with the right house, give it your best shot. You may only have one chance for your offer to be seen so put your highest and best offer forward first. If you're financing the purchase, consider waiving the "appraisal" as a contingency in your offer. This option is not available to all buyers but if you do have more down-payment then you need, this may put you on top. Of course, you'll want to crunch numbers with your lender and agent prior to making this commitment.

7. Give, don’t ask for concessions. Each offer will most likely be viewed in its entirety, meaning every time a buyer makes demands they are each weighed against those in other offers. For example, I'm finding that many sellers are also buyers right now and facing their own set of challenges. Consider renting the home back to them for a short period after close of escrow, in some cases the "terms" are of equal importance as the price. In the end, putting together an intuitive, fair and tidy offer gives you a stronger chance. Don’t get hung up on small details.

Getting yourself into the right mind-set, doing your homework, and choosing an experienced buyer’s agent to represent you are the keys to success. For more discussion on the buying process visit recommended inspections when buying a home.

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