Mortgage rate averages have jumped to their highest level since late 2018 and there doesn’t seem to be any relief coming in the near future. The rise in rates comes on top of an already sizzling housing market. Demand remains strong, and supply remains historically low. There is a buying frenzy going on in Texas right now with home prices soaring over 18% year over year. How do you make your offer stand out with multiple bidding situations?
1.Get preapproved or Underwriting Approval by a lender. Ask if your lender will do an up-front underwrite and if so make sure you get the lender the documents requested as soon as possible and instead of a Pre-Approval letter you will get an Underwriter approval letter. It will save you a lot of back and forth with the paperwork
2.Make sure you have a Realtor and a Lender that will go the extra mile with the Seller and the Sellers Realtor. Not only do we have a buying frenzy we also have buyers willing to pay the difference between what the Seller is asking and what the appraisal comes back at. Before doing this make sure your Realtor has pulled comps and is confident as to what the home is actually worth-and the Realtor provides those comps to the Appraiser when they come out to do the appraisal. The Realtor can do a cover letter with your offer introducing you, how strong your offer is, your lender and their contact information and if you already have underwriting approval. First time Homebuyers do not get discouraged! If you do not have the ability to pay an extra $10k-$20k or more for an appraisal gap offer to pay for minor fixes, do a free leaseback to the Sellers for a few days or a week, or offer extra earnest money.
3.Look at “stale” listings. People assume if a house is on the market for a few weeks or more there is something wrong with it. Not necessarily true. Sale might have fallen through. Appraisal came back low. Home may be too overpriced.
4.More often than not there are multiple offers on a home. Look under your maximum so you can bid your maximum if you need to (after the Realtor has pulled comps and is comfortable the appraisal should come back at what you are bidding or close to and have the funds to pay the difference).
5.With so few homes available change your strategy. Broaden the area you are looking to buy. Look past cosmetics that can be easily changed-wall color, flooring, lighting fixtures-and instead focus on the big ticket items: the roof, foundation, layout, furnace, A/C, and windows
6.Lock the rate while you are looking to purchase an existing home. We have a Lock ‘N Roll Program where you can lock the rate for 90 days and if you find a home within that time frame can extend for 30 days. For new homes we offer a Lock ‘N Build program where you can lock your rate for up to 12 months with an upfront lock fee, a rate renegotiation and up to 2 extensions for up to 60 days.
Above all patience is key! You will find your new home-it just may take a little more time!
