When buying your first home there are some key things you need to do in order to be successful. These are important also for those of you who are experienced, or are sellers who are thinking about selling and also buying a new home.
In Part 1 we discussed the importance and value of getting a lender pre-approval for a loan.
Part 2 was about the benefit to you with working with a well-qualified Buyer Agent who can and will look out for your best interests. The listing agent can’t do that!!
Part 3 focused on why it’s important to know what you NEED in your new home.
So here’s Part 4 for some serious consideration. It’s an important one given the impact the market has on buyers these days – pricing, the offer strategy, and more. And you want to try and avoid a mistake since once you buy a home it’s yours…you can’t take it to the return desk!
UNDERSTAND THE LOCAL MARKET CONDITIONS
You’ve probably heard that “real estate is local” and it’s absolutely true. While there are general principals, like supply and demand, local market conditions will affect you in significant ways:
- the inventory that is available to you in your price range
- the competition from other buyers due to demand and how this impacts price and negotiations
- pricing, and sales prices (are homes selling for over-asking price?)
- the best strategy to use when making your offer
- negotiations you and your agent should have with the listing agent and seller so you get the best price, terms and conditions, and more
It’s essential that you do your own research on the housing market so you gain a feel for what is happening and how active your local market is. Looking at homes online will help you better understand what is going on but will also provide valuable clues about prices, how quickly listings are selling, neighborhoods and amenities that interest you, and more. Watch what is selling, how quickly it’s selling, and for what price as compared to the list price. These days it’s not unusual for houses to sell at or above the list price depending on the competition and the price range, while others will sell below asking price.
But the best source of the true nature of the local market and how this can and will affect you is your REALTOR®. There’s a huge value to working with a qualified agent who is in the trenches daily and knows that’s going on in detail locally, AND will educate you with respect to your personal and financial situation.
It’s in your best interest as a home buyer to understand what the local market conditions are so you can make the best offer on the right house.