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Looking to Buy This Year? Get Your Ducks in a Row!

Persistent lack of inventory has left Boston and suburban home buyers frustrated. This condition has been prevalent for well over two years, and forecasters say it won’t change in the near future. Not only do buyers have fewer options, the competition for what is on the market proves daunting. The natural conclusion would be that it’s a seller’s market. While that’s true to a certain extent, caution, and a dose of reality are also advised to sellers who are considering listing their homes. Whether buyer or seller, however, it’s all the more important in the current market to get professional help. And do this well in advance.

As the market is the most challenging for first time buyers, it’s advised you steel yourself for what is probably the most emotional decision in your lifetime. But keep in mind, you can prevail. Even if you currently own and are looking to move up, preparation is everything. Even if you think you’re not ready to make your move, you must be prepared to act quickly. Remember, inventory and urgency! If you are looking at what’s on the market and attending open houses, you’re in the market! And it’s crucial to get your ducks in a row.

Get yourself a real estate agent who knows what they’re doing. Your agent knows the process and will act on your behalf in the most-timely manner. This is a fast paced market, and properties are going under agreement in single digit days. If you're not prepared to act quickly, you'll lose out on properties that you like. Your agent will provide you with empowering information so you can make your best decisions. Once you see the property you want, it’s imperative you make your offer quickly. Or as quickly as possible after doing some due diligence. Your agent will guide you on how to position your offer and negotiate on your behalf.

Get yourself a knowledgeable lender. Depending on your timeline for purchase, you’ll need a pre-approval. The pre-approval is crucial for two reasons. It informs you of your purchasing power, and is a necessary component to any offer. Unless you offer cash, a seller won’t even consider your offer unless it’s accompanied by a pre-approval. Pre-approvals are generally good for 45 to 60 days, and can be refreshed quickly. Many buyers, however, say they aren’t ready to pull the trigger- so they delay these first two steps. Until they see their dream home, and they’re already behind the eight ball. Once you have an accepted offer and have done the inspection, that’s generally the time to submit your application.

To better compete, many buyers are offering all cash, or more cash on deposit. If you are paying cash or increasing your down payment ability by borrowing money from friends or relatives, it should be cured. This is especially important if your funds will come from an international source. Get the money into your account as soon as possible and be prepared to provide a gift letter as to its origin.

Another way of rising above the competition is to drop contingencies. But dropping a home inspection contingency should be very carefully considered, especially with an older home. Your agent will help you with their experienced eye, and asking the right questions. Some buyers are dropping the mortgage contingency, but this should also be carefully considered. And done only when the buyer is confident of their abiity to obtain their loan. However, many other contingencies can easily be dropped. Buyers should also be prepared to work with the seller’s schedule and make no problematic demands.

When a mortgage is involved, especially in an FHA (government backed loan), with a smaller down payment, the regulations on home condition and code issues are more stringent. And the lender may require a home inspection to discover if any of these issues exist. If so, the lender will likely require the seller to make certain repairs before closing, which may affect the final price.

Another consideration possibly affecting the final price and a buyer's ability to get a mortgage, is the lender’s appraisal. In a rising market such as this, many properties are sold at over asking price. If the property doesn’t appraise at the agreed upon price, or over- the parties will need to re-negotiate. And one, or both parties may be required to put more money into the transaction. Usually this is the buyer.

Many added concerns and details will affect your home sale transaction. Some will be unanticipated, adding unwelcome costs and delays. Unless you hire experienced professionals. Your real estate agent and your lender will be your best advocates during the transaction process.