A tight real estate market is a complicated one... The market has been tight for years and then we piled a pandemic on top in 2020. So how can you play your cards right in a complicated market like this?
Professional representation
As a buyer, you are already drawing the short straw when inventory is low and competition is high. The increase in online real estate resources is impressive, but they don’t replicate the value of proper, experienced representation in a real estate transaction. Now more than ever, you need an agent with expertise and connections can best provide guidance that will help you protect your interests and your wallet.
While DIY home-browsing may spark a lead on a potential property, doing your own end-to-end house shopping likely will end up in missing out. Especially since the implementation of the Clear Cooperation policy in 2020. The policy requires listing brokers who are participants in a multiple listing service to submit their listing to the MLS within one business day of marketing the property to the public. Meaning, the agents CAN'T market a property online UNLESS they also market that property through the MLS. So - as a buyer, the MLS portal your agent sets up for you IS the most comprehensive database you can use. Under this new policy, homes in MN can be advertised on the MLS up to three weeks prior to the seller showing the home, giving the buyers more time to be prepared to make their best offer.
Direct your attention
Don't waste your time on a home where you can't afford to get into a bidding war and potentially miss out on a lower-priced plausible alternative. Shopping under budget will also help to prevent cold feet and anxiety over minor repairs your inspection turns up.
Comparing homes in the same price range and location will help you quickly identify a good value and a good fit for you so you are confident in moving quickly. It's hard to recognizing a good value when your budget is all over the place.
When inventory is low and buyer's compete, the seller has many options in regards to who to sell to. If you find something you like, keep your offer simple. Flexibility to the seller’s closing dates, not making too many requests, etc., can make your offer stand out from others. If you have too many necessary stipulations, a competitive buyer's market may not be a good time for you to purchase. Waiting until you need less from the seller, i.e. less closing costs contributions and less repairs will make your home purchase more successful.
Shopping for a home (and driving up competition) when your situation isn't ideal is only helps to drive prices up and result in frustration. It's OK to rent until you can buy.
Spend some time with your financial planner and/or lender to help ensure your position is strong before you start your home search.
Learn about homes coming soon to the market.
