Tips For Successfully Buying a Home in a Competitive Housing Market

The housing market first heated up during the Coronavirus pandemic and shows no signs of slowing down. Partially due to a shortage of inventory, homebuyers face a seller’s market in which bidding wars are not uncommon. So, how can you land your dream home in 2022? Whether you’re a first-time buyer or more experienced, make sure you’re prepared for today’s competitive housing market with this guide from First Bankers Trust.

Get pre-approved

Pre-approval for your mortgage loan will be an essential first step, enabling you to conduct your home search with confidence.

Getting pre-approved or pre-qualified for your mortgage loan means sharing basic personal and financial information with your lender so we can provide an estimate of the amount you could borrow and the interest rate you could receive. Many real estate agents require you to show a pre-approval letter before they will show you homes. It demonstrates your seriousness to both the real estate agent and the seller when you’re ready to make an offer.

What if you don’t get pre-approved before you start shopping for a home? Sometimes purchases can fall through if financing is not squared away ahead of time. Having all your ducks in a row before going to make an offer will make you a more appealing buyer for your dream home. At First Bankers Trust, our loan officers make the pre-approval process smooth and easy.

Contact us today and one of our Mortgage Advisors will guide you through the home purchasing process.  Going through the pre-approval process is also a great way to learn how much you can borrow before you go out and find your dream home. Know what your realistic price range is before you fall for something above your budget. We strive to make your experience as smooth and easy as possible.  We want to help bring you HOME.

Communicate with your buyer’s agent

Working with your realtor should feel like a true team effort. Communication is key so you can help your agent understand how they can best assist you.

While there are plenty of real estate agents out there, you want to find one who can give you the time and attention you need, someone you feel comfortable sharing your hopes and dreams with. For the duration of your home buying process, your buyer’s agent may have to serve as a part-time therapist by providing advice, helping you figure out what you really want, and encouraging you to keep going in a competitive market. So, ask friends and family for recommendations and talk to several agents before choosing one.

Once you have a real estate agent, define what you’re looking for in a home. What is a must-have vs. a nice-to-have? For example:

  • What type of property are you looking for?
  • What kinds of amenities do you want to have nearby?
  • Are you interested in a specific neighborhood or location?
  • Do you need a home office or other particular considerations?

Remember that a buyer’s agent should be doing some of the legwork for you to narrow the options and help you find the right home for you. Don’t be afraid to ask why they thought this or that listing would interest you. A good agent should be able to listen to your preferences and help you find “the needle in a haystack,” i.e. a home that has everything you want (or close enough) and is in your price range.

Organize your documents

There are a handful of documents that you will need to provide during your mortgage application process, so review our list below to ensure you are prepared.

Prepare the necessary documents before you get pre-approved or apply for a mortgage loan. Getting organized in advance will help ensure the process can be as smooth as possible so you can move on to searching for your new home.

What To Bring When Applying

Certain documents are required for your loan package. Here is a listing of items you will need to collect and have ready to process a mortgage loan:

On your first visit to let us pre-qualify you, please bring:

  • Copies of Your Photo ID
  • One month’s worth of paystubs
  • Federal Income Tax Returns from the past 2 years
  • W2s and 1099s, if applicable, from the past 2 years
  • Checking, savings, or other asset account statements from the past 2 months. All numbered pages and copies of originals.
  • Additional items may be requested based on your individual scenario

Should I waive the home inspection or appraisal?

Prioritizing your needs will help you make the right decisions as you and your agent draft an offer on a home. Home inspections can potentially help you save money on necessary repairs that you did not catch during a tour.

Navigating a competitive housing market can make you feel pressured to skip typical steps in the home buying process such as inspection and appraisal in order to have your offer accepted. However, there’s a reason why a home inspection and appraisal have become standard. Waiving these things could leave you vulnerable to unexpected financial issues down the line.

Skipping an independent home inspection, in particular, could expose you to unexpected repair costs after you buy the home. For example, a good inspector can identify problems such as an older heater or roof in need of repair that you would probably not pick up on while just touring the house with a real estate agent. And skipping a home appraisal may leave you unable to secure financing for your home purchase without bringing more money to the table. It’s better to do your due diligence rather than face the potentially expensive consequences.

Remain persistent

When shopping for a home in a competitive housing market, make your mantra “We can do hard things.” Keep calm and carry on, remaining persistent and understanding you may need to compromise on your nice-to-have list in today’s market. All you can do is make the strongest possible offer within your budget, knowing that other buyers will do the same. Your real estate agent should be able to guide you through the offer process. And, if you don’t get the first house you make an offer on, stay patient. You’re not alone in this experience and you’ll find the right home eventually.

Get pre-approved for your mortgage loan today!

Serving our communities since 1946, First Bankers Trust Company has lived by the motto that customers are always FIRST. Are you ready to apply for a mortgage or have questions about comparing mortgage loans?  Learn more about mortgage programs that you qualify for, and what type of home loan is best for your needs. Our friendly and experienced loan officers will help you understand your home loan options in West Central IL and guide you through the homebuying process. For more on the home buying process, check out our “Mortgage Lending 101” resource. Contact us or apply online today!