The holidays are over and the real estate market is beginning to heat up again. If you’re planning on shopping for homes in the coming months, you may notice that you have a little more competition than you would have if you began shopping in December. As the weather starts to warm up, more homeowners will begin listing their properties and the buyers will be out in droves. In fact, many experts are predicting that spring 2014 will be a seller’s market. So how do you make sure you’re well positioned when you step into your dream home and decide to make an offer? Here are a few tips that will help you stay competitive throughout the process.
Start by eliminating debt
This process may take longer than just a couple of months, but it’s a critical step if you want to be a stronger buyer. It’s time to eliminate credit card and other debt you’ve been dragging around for years. Sit down and take a look at your budget to formulate a payment plan, and then stick to it. If you’re tech savvy, consider downloading a mobile application that can help you stay on track with managing your finances. This will help simplify the process. Eliminating some of your debt will increase the likelihood that a bank or credit union will give you a mortgage to purchase your new home. It’ll also help you save up more money for a down payment, enable you to make a higher offer, and give you an emergency or renovation fund. Start budgeting sooner rather than later so that you’re well positioned when you decide to buy.
Consider selling your home first
In a competitive real estate market, a home seller is more likely to accept an offer with less contingencies. Obviously, you’ll want to include the standard home inspection contingency to protect your investment. But if you own a home and haven’t listed it or you haven’t received any offers on your property yet, you may want to hold off on shopping for a new house until you’ve found a buyer. It may at least be time to launch your own home sales process. The reason is simple. Sellers want offers from buyers who are ready to purchase. If you’ve sold your home or you’re under agreement, your offer is more likely to be accepted. There’s simply less risk involved in the transaction for the seller and you’re more likely to be able to close a house sale quickly.
Before you begin shopping, reach out to a local credit union or bank to get preapproved for a mortgage. This is helpful for two reasons. First, the bank will analyze your debt to income ratio so you’ll have a better sense of how much you can afford to pay for a home. This will help you avoid the unfortunate scenario of getting in over your head with high monthly payments. Second, a preapproval signals to home sellers that you are a serious buyer. Since the bank has already given you a conditional approval for a certain amount of money, it lessens the chance that you’ll back out of the transaction because you’re unable to secure financing. A preapproval also speeds up underwriting your actual mortgage, which puts you in a good position to quickly close a sale.
If you’re considering purchasing a home in the next few months, it’s important to be prepared. Many buyers begin shopping for real estate in the spring so you’ll likely be facing some competition. Before you start looking, consider paying down your debts, putting your current home up for sale, and getting preapproved for a mortgage. These three steps will help you put your best foot forward when you decide to find homes for sale in Michigan!
Carrie St. John is a marketer and real estate agent in Detroit. She is passionate about helping her clients find homes for sale in Michigan and guiding them through the buying process.