There are more than a few hot markets in the country right now. House prices are changing to record levels in many, many areas. While that may be good for property sellers, it’s far from the best situation for you as a buyer. Your goal should be to avoid overpaying for a house in a hot market. Here’s how you can do that…
1. Know-How Much House You Can Afford
The easiest and best way to do this is to schedule a meeting with a mortgage loan officer. Who can let you know exactly how much house you can afford. This is a meeting that you should schedule before you even go out looking at properties.
To get the most accurate mortgage estimate, be prepared to furnish the loan officer with as much information and documentation as possible. This includes income documentation as well as bank statements. The more information that you provide, the more accurate the estimate will be.
Also, get a pre-approval letter. That will strengthen your case when you make an offer on the house.
The reason for doing this is to make sure that you know exactly how much you can afford to offer on a potential home. In hot housing markets, the home buying process moves much more quickly than it does in more balanced markets.
You have to move quickly when you find a property that you want. Therefore, have accurate information like how much you can afford to borrow right upfront.
It would be embarrassing to get involved in the purchase offer process on a home, and later find out that you were overpaying. That can waste a lot of time – yours, the property seller’s, and the real estate agents on both sides of the transaction.
2. Know General Market Values in the Area
In hot markets, it’s very easy to find yourself overpaying. The best way to avoid that outcome is to know what market values are in the area where you are looking to buy a house.
You can do that simply by checking online sources. It provides estimates for virtually any property available, even if the property isn’t on the market.
If you’re looking for more specific information, such as final closed sale prices, then check out Kenya Homes. We will also provide estimates of the value of nearly any property in a neighbourhood, but closing prices are the ones that matter most.
You will want to make sure that any offers that you make on any properties don’t significantly exceed closed property values in the neighbourhood.
3. Don’t Panic Buy
Fearful that they will miss out on buying a home, many buyers panic themselves into buying a house. Sometimes this happens because they hear how quickly houses are selling in the area. Other times it happens because they are pressured by real estate agents to make an offer and close the deal.
Not only can panic buying cause you to pay too much for a home, but it can also force you to purchase a property that isn’t right for you. Should you realize after your offer has been accepted, it may be too late to back out of the deal. This could lead you to close on a house that you really don’t want, out of fear of being left homeless.
Hot housing markets are frenzied markets, but that’s the exact reason why you need to keep your head about you if you’re looking to purchase in one. When you panic buys, you’re out of control, and that’s never the right state of mind to buy something as important as a house.