Buying a new house can be exciting, but it can also be stressful if you’re competing with other buyers. In competitive markets, the prices are high, the buyers are ravenous, and good homes seem to fly off the market without so much as an opportunity to make an offer.
There are some obvious ways around this. For example, you could start looking in neighborhoods that are less competitive, sacrificing your personal taste or distance from work to secure a less-contested home for a lower price. But if you’re interested in getting a great house for a decent deal in the hottest part of the city, you’ll need to step up your strategy.
Work With an Aggressive Buying Agent
For starters, make sure you’re working with an agent. A buying agent will work on your behalf to sniff out the best deals, and help you initiate and negotiate an offer that secures you a good home faster. If they understand the local market, they’ll be able to jump on good houses faster, and they’ll work quickly to get in touch with you and schedule tours. They may also be able to provide you with location-specific advice; for example, you may learn that in this neighborhood, home sellers tend to lean toward offers with no contingencies.
Become an Agent in Your Own Right
It’s a time-intensive step, to be sure, but if you truly want a competitive advantage over the other buyers in the area, one of the best assets you can have is a real estate license. Depending on where you live, you can likely get your real estate license entirely online in a matter of weeks. Once you’re fully qualified, you’ll have early access to deals before they ever get to market—and you’ll have a deeper knowledge of how real estate transactions work, so you can make more intelligent, competitive offers. Plus, as an added bonus, you’ll be able to do full-time or part-time work as a practicing real estate agent in the future, which can be an excellent source of personal revenue.
Be Ready to Jump
If you’re the type of person who likes to take their time with big decisions and think through every variable, there’s nothing inherently wrong with that, but it’s going to work against you in a competitive housing market. If houses are being bought almost instantly when they become available for sale, you’re never going to make an impact with this strategy. Instead, you need to be ready to review new houses and put together an offer fast. Talk with your partner, if applicable, and make sure you understand your wants and needs thoroughly; when you see a house that meets most of your wants and needs, get an offer together quickly. You might not have much time.
Skip the Contingencies
Contingencies are a good way to protect yourself when buying a home, and to get a bit more value out of your transaction. If your home inspection reveals small things wrong with the home, like a cracked wall, or a minor plumbing issue, in a cool market, you might demand that the homeowner fix these things before you move in. But contingencies will make your offer stand out in a competitive market—and not in a good way. If a home seller has multiple offers on the table, and some of them are contingency-free, they’re going to take immediate priority. If there’s something that needs to be fixed, consider fixing it yourself when you move in instead of putting the additional pressure on the home seller.
Make a Serious Offer
The give-and-take negotiation process of a typical home sale is disrupted slightly in a competitive market. Listen to your agent and pay attention to trending sale prices in the area, and be ready to make a serious offer. If homes are frequently selling above list price, your offers need to be similarly above list price. If a seller makes a higher-than-expected counteroffer, consider it seriously.
If you’re making high offers and are still struggling to get attention, consider making an all-cash offer. This may or may not be feasible, depending on the price of the home and your current financial resources, but it can make a big difference if it’s an available option to you.
Knowing When to Quit
Sometimes, the high prices and stressful transactions of a popular area simply aren’t worth it. Make sure you understand your home buying priorities inside and out, and be prepared to call it quits if it isn’t worth the extra stress. There are lots of neighborhoods out there, and chances are, you can find something similar to what you want in a cheaper, more reasonable alternative area.