In such a hot seller’s market it is important to know how to compete. Good properties offering good condition, price and location will inevitably receive good offers from multiple buyers. Creating the dreaded … bidding war/multiple offer situation.For you as a buyer it’s not only good to have your ducks in a row before you start. Its also a good idea to have your best and final offer in mind when you make your initial offer.
While seller’s are interested in their net profit. Their also interested in your qualifications to purchase the home their offering for sale. Your qualification to buy consist of your credit worthiness to buy. The stability of your income. Your funds available to buy. Finally your readiness to buy.
Credit worthiness, its exactly as it sounds. Is your credit worthy enough to support a mortgage loan. Have you shown an ability to pay your creditors on time. As well as being able to manage your credit in way that it does not exceed reasonable credit minimums and maximums. Using only thirty percent of your credit line on most credit cards is generally a good rule of thumb. Your credit history often reflect your ability to pay in the future.
Stable Income, is considered to be an obvious pillar of your qualifications to purchase. In today’s market a two year tenure in an industry or job is considered stable but not absolute. However starting a new higher paying job or career in April doesn’t necessarily mean you are stable and able to buy in June. Therefore, be sure you have the tenure or contract that indicates you are or will be stable for at least two years. Anyone can have a good season or good year. Tenure is something more than a season or year. Be sure to realize the difference between the two before your home search.
Funds available to close, even though there are city, county and state programs that assist with first time home buyers funds to close. These programs typically require additional processing time, hence extending the time to close. Sellers are generally interested in closing as soon as possible, therefore the hint of extending the processing time is not very appealing in the eye of the seller.
If you are expecting to compete with a cash buyer or any other buyer its sound advice to have at least five to ten percent of the sales price available in cash for settlement cost. Though your settlement cost may not require five to ten percent of the sales price. It’s good to have it on hand to successfully compete with the cash buyer.