Spring and summer are typically the busiest seasons for buying and selling homes — but that might not be the case this year. We’re in what some pros call a “low inventory market,” meaning there aren’t that many homes for sale, but there are more than plenty of buyers.
Though COVID-19 has undoubtedly made the buying situation more challenging, the number of available homes for sale across the country was in decline for a while even before the pandemic. Now that we’re in a pandemic, some potential sellers may choose to wait it out rather than worry about having strangers walking through their homes, and others may be deterred by uncertainty about their jobs and income.
“Our business usually picks up in March and April, with May being the busiest month,” says Jennifer Suemnicht, a RE/MAX Realtor in Seattle. “COVID-19 has definitely slowed everything down.” With fewer properties to choose from and more buyers for those that are available, it may help to get a little creative as a homebuyer this year. Here are some tips:
- Get pre-approved
“Having a pre-approval is very important. It shows sellers you’re serious and have already contacted a lender who’s agreed you are creditworthy,” Suemnicht says.
Shop around for loan options based on your income, credit score, and debt. It’s recommended you talk to at least three lenders and compare what they offer you. If you don’t have a lender in mind, you may be able to get a referral from your real estate agent, a friend or coworker to get started. You can also shop around for a mortgage broker to assist you. Many have their fees paid by the lender at closing, so it may not cost you anything to enlist a broker for help.
A lender or broker will run some numbers to determine how much you qualify to borrow and give you a letter stating that you’re preapproved for that amount. (We explain more about pre-approval letters in our 7 steps to take out a mortgage.)
- Find a good agent
“A good real estate agent is like a good detective,” Suemnicht says.
They’ll ask questions to understand your needs in terms of location, size, and amenities, and use filters in websites that list available homes for sale so they can receive alerts when suitable homes come onto the market. This way, you may be able to go see new listings as soon as the day they become available.
- Make your offer stand out
When the demand for homes for sale outweighs the available supply, homeowners may find themselves in a “bidding war” when they put an offer on a home. A bidding war is when the seller gets several offers to choose from. They’ll counter some of these offers, causing buyers to increase the amount of money they’re willing to pay in an effort to outbid each other for the home.
To prepare for a potential bidding war, it may help to work with your real estate agent to make your offer stand out above any others. This can help your offer be accepted for reasons other than what you’re willing to pay for the home.
There are numerous ways to make an offer stand out, which your real estate agent can explain to you, including being flexible about the closing date or agreeing to close quickly. Some people even write a personal letter to the seller!
Most importantly: if at any point you are feeling frenzied during the buying process, remember to take opportunities to turn down the noise and allow yourself the time and space to think clearly and make the decisions that work for you.
Good luck out there. We’re here if you need us. In the meantime, here are some more relevant posts:
- What if other buyers try to buy the same house? Preparing for a possible bidding war.
- Wondering how to go about the homebuying process from a social distance? Check out our blog series on buying a home during COVID-19.