How to Buy a House in a Competitive Market: 5 Tips

The past few years have brought record-high home prices and record-low home inventories across the country, including West Michigan towns. This has made the selling process a quick, simple, and lucrative one for many homeowners. Unfortunately, we can’t always say the same for those looking to buy a home.

Buying a home in a competitive seller’s market can be difficult — but it isn’t impossible. Here are some helpful tips to get you started.

5 Tips for Buying a House in a Competitive Market

Ready to start your home buying journey? These five tips will set you up for success, no matter how congested your local real estate market is.

1. Do Your Research

Doing your research is an important first step in any home buying process, but it becomes even more important when you’re dealing with a competitive market. Even though you feel like you need to move quickly, moving too quickly can do you more harm than good.

Take some time to gain a good understanding of your local real estate market. While you may have heard things in the news or online about the nationwide market, it’s important to know what’s going on in the specific place you’re looking to move. This could mean doing a number of the following activities:

• Talking with a local real estate agent
• Driving around to scope out different neighborhoods in the area
• Touring a number of homes in the area (physically or virtually)
• Chatting with friends, family, or coworkers in the area

Regardless of how you choose to do your research, spending that time getting to know your market can give you the knowledge and confidence you need to start making solid offers.

2. List Out Your Needs & Wants

Once you’ve done your research, the next step is to list out your needs and wants — and yes, those are two different things! If you’re hoping to buy a home in a competitive market, it’s likely you’ll have to make some compromises. Having an upfront understanding of what’s negotiable and non-negotiable is important.

Your needs are non-negotiable features you must have in your new home. Your wants are negotiable features you’d like to have, but that you could also compromise on if need be. For example, you may need two bathrooms and office space. You may want a finished basement and a fenced-in backyard.

Knowing your needs and wants — and the difference between them — can help you more easily determine if a home meets your standards or if it’s time to walk away. It’ll help you act faster in a market that requires quick decision-making.

3. Get Pre-Approved for a Mortgage

The majority of home buyers need some sort of financing. If you’re in the same boat, getting pre-approved for a mortgage is important.

Getting pre-approved for a mortgage before you start house hunting allows you to make smarter decisions about your financial investment. You’ll have a better understanding of what price range you can afford because all your financial information will be in front of you, including:

How much you can borrow
How much you can spend overall
How much your monthly mortgage payments may be (based on your income, credit score, and down payment)
How high your interest rate may be

All of this information can help you narrow down your home options and make informed financial decisions about what you can and can’t afford. And when homes are selling for $5,000-$50,000 over the asking price, that’s an important number to know.

4. Avoid Panic Buying (& Overpaying!)

That brings us to our next tip: don’t get sucked into panic buying! It can be easy to feel overwhelmed in a competitive real estate market, but it’s important to stay as calm and patient as possible. Panicking and rushing into a home purchase can result in overpaying for a home and regretting your decision.

Unless it’s really a perfect match and a price you’re comfortable with, don’t purchase the first home you see. One benefit of a congested market is that you’ll likely find another one you like on the market in no time.

5. Consider Investing in a Fixer-Upper

If you’ve been exclusively looking at new homes, try broadening your search to include some older fixer-uppers. These properties are typically priced much lower than new homes, and there typically aren’t as many people flocking to buy them.

Investing in a fixer-upper home can be extremely rewarding, even if you don’t have the DIY skills, time, or energy to complete renovations by yourself. Nowadays, there are many real estate investment firms (including our team at Hometown Development!) that purchase fixer-upper homes for cash, then work their magic to remodel and transform them into gorgeous living spaces.

Having a real estate investment firm professionally remodel your home comes with many benefits. You can have the price savings and longevity of a new home without having to commit to the remodeling work yourself. Also, these houses are usually located in growing neighborhoods close to schools, businesses, restaurants, and other amenities, so you can enjoy an equally fulfilling life outside of your home. It’s truly a win-win process, especially when new homes are overpriced and hard to get your hands on — just ask some of our past clients!

Trust Hometown Development to Flip a Home You Love

In a competitive real estate market, it can be tricky to find a home that you adore and that you can afford. At Hometown Development, we’re here to make that process easier for you. We’ll take an affordable, fixer-upper property and transform it into a home your family will love for years, allowing you to enjoy the best of both worlds. To learn more about how and why we do what we do, contact our team online.