This one goes out to those furiously hunting, future homeowners in the Northwest. (Looking at you Seattle and Portland!) A recent report from online real estate company Zillow confirms what most house hunters in Washington and Oregon already know – it’s a competitive market for those looking to buy a home. And things don’t appear to be changing in 2017. Zillow’s report includes Seattle, Salt Lake City and Portland in the top 10 hottest housing markets for this year.
So what’s a home hunter to do? Here are a few tips to help make the search a little easier, especially in these competitive markets.
In a hot real estate market, properties will likely be moving throughout the year, but some months are more strategic to search than others. If you can, consider shopping during the fall and into holiday season, as many people wait until January or the spring to start looking.
Get mortgage prequalified or credit approved before you start shopping.
As a hopeful homeowner, this could be the biggest advantage you can give yourself. Although you may be confident that you’d be approved for a mortgage based on your steady employment, low debt-to-income ratio and credit score, the seller won’t be aware of that unless you have the documentation to prove it. And in a hot market, getting prequalified or credit approved is almost certainly a deal breaker for sellers.
At Washington Federal, we’re a little different than most lenders - we offer true credit approvals, not just prequalifications – which can be a big advantage when shopping for a home. We keep every loan we make on our own books; we don’t turn around and sell our mortgages to another bank or on Wall Street. As a result, we want to make sure that you’ve got a loan that makes sense for your financial situation before you start shopping for a home. To do this, our underwriting takes place prior to making an offer.
With most lenders, you’ll provide some initial information, and they’ll give you a prequalified amount. Then, after you make an offer, you may still need to go through a lengthy underwriting process, where your “qualified” amount might change. This can result in a lengthier closing time and a possibly lower loan amount than you were counting on, both of which could lead to losing out on that house. With Washington Federal, all credit underwriting is done at the beginning, so you’ll know exactly how much you’re approved for while you’re shopping. (Subject to a credit approval.) Click here to find out more about a home loan* from Washington Federal.
Be ready to move fast.
This means both physically and financially. In a market like Seattle, where the average home was listed on the market for just 8 days, sellers typically want to close a deal and move out quickly. (Data reported in June 2016 by Redfin.) Don’t shop unless you’re prepared to make an offer, because the house you love probably won’t be there after you get a prequalification or credit approval in place. On the financial side, a credit approval will help you cut closing time significantly.
Start with your best offer.
Unfortunately a hot market likely won’t mean a “deal” for a buyer, and you may only get one chance to present an offer. Make sure you’re competitive right from the start.
If you do find that dream home, then you may want to ask an experienced real estate agent to help you determine if an escalation clause would be advantageous for you. An escalation clause essentially states that you’re willing to increase an offer up to a certain limit if other offers come in that match or top your initial bid.
Good luck out there!
*All Washington Federal loans are subject to credit approval and acceptable appraisal.