6 Steps for Buyers Competing in a Tight Market

Buying a home can be challenging when inventory is limited, prices are high and the homes you want are attracting plenty of attention. And if you’re a first-time buyer, you may be entering the market without proceeds from the sale of another home to help with your upfront costs.

The good news: being prepared can make a big difference.

These six steps can help you strengthen your position, understand your options and be ready when the right home comes along.

1. Get your down payment in order.

You don’t necessarily need to wait until you have 20% saved to buy a home. There are low down payment mortgage options and thousands of homeownership programs across the country that may help with down payments, closing costs and other upfront expenses.

Start by exploring whether you may qualify for a homeownership program and talking with your lender about the options available to you. Some programs can serve first-time buyers, while others are available to repeat buyers, specific professions or buyers purchasing in certain communities.

The goal is to understand your full financing picture before you find a home so you can move forward with confidence when the right opportunity appears.

2. Get your homebuyer education.

A homebuyer education course can help you better understand the buying process, from budgeting and mortgages to inspections, closing and the responsibilities that come with homeownership.

Many courses are available online, while others may be offered through local housing organizations or counseling agencies.

Homebuyer education may also be required for certain down payment or homeownership programs. Completing it early can help you better understand your options and avoid having to fit the requirement into an already busy closing timeline.

3. Get pre-approved – and shop your loan.

You probably compare prices before making most major purchases. Your mortgage deserves the same attention.

Consider talking with more than one lender about available loan products, interest rates, fees and homeownership program options. Our 5 essential questions for your lender can help get the conversation started.

Once you choose a lender, getting pre-approved can give you a clearer idea of what you may be able to afford and show sellers that you’ve already taken important steps toward securing financing.

Just remember: a preapproval is not the same as final loan approval. Your financing will still depend on factors such as the property, appraisal, documentation and underwriting.

4. Contact a real estate agent.

Buying a home is a major financial decision, and you don’t have to navigate it alone.

A knowledgeable real estate agent and loan officer can help you understand the market, evaluate your options and prepare for the decisions ahead.

Ask friends, family or your loan officer for agent recommendations, or research professionals in your area. Interview a few candidates and ask about their experience working with buyers whose needs are similar to yours.

If you plan to use a down payment program, it can also be helpful to work with professionals who understand how homeownership programs fit into the buying process.

5. Use technology to keep up with inventory.

In a competitive market, timing can matter.

Ask your real estate agent to set up an automated home search based on your price range, preferred neighborhoods and must-have features. You can also create alerts through major home-search websites and apps so you know when new properties that match your criteria become available.

But don’t rely on technology alone. Stay in regular contact with your agent and let them know which features are truly essential, and where you may have some flexibility.

Being prepared to evaluate a new listing quickly can put you in a stronger position without forcing you to rush an important decision.

6. Build some flexibility into your search.

Your first offer may not be accepted, and the perfect home may not check every box on your original wish list.

That doesn’t mean you should settle. It does mean that a little flexibility can create more possibilities.

Consider expanding your search to nearby neighborhoods, different home styles or properties that may need cosmetic updates. It can also be worth revisiting homes that have been on the market longer than others. A property that was overlooked initially may offer an opportunity with less competition.

Talk with your agent about where you can adjust without compromising the things that matter most to you.

Preparation can be your competitive advantage.

You can’t control how many homes are available or how many other buyers are looking. But you can control how prepared you are.

Understanding your financing options, exploring available homeownership programs, building the right team and knowing where you can be flexible can help you approach your home search with a stronger plan.

Ready to see what homeownership programs may be available to you? Search for programs you may be eligible for.

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