The current conditions of the housing market, such as low interest rates, increasing price of rents and stronger job security make more individuals more confident in purchasing a home. According to a report from the washingtonpost.com, other factors intervene as well as many challenges lay ahead for first time buyers which dampen this spirit and make it more difficult to get the best value for money.
The tight market conditions require specific actions to protect the interest of the buyer and gain more value in a competitive seller's market. Here are the following steps needed to purchase the right home for the individual buyer.
- Obtain a pre-approval letter. This letter would prove to the seller that the buyer has been vetted or reviewed financially. The letter would also provide the calculations as to the best mortgage provisions that is affordable for the individual buyer. This would limit the options to houses of reasonable price ranges.
- Know the Competition. Have the buyer's broker review the listing agent's guest list during the open house and determine if multiple offers have been made. Many offers would mean a bidding war which inflates the price over and above true value.
- Include an Escalation Clause. This would ensure that even a bidding war ensues, the offer would include an extra amount spread over time in order to assure the seller of the buyer's commitment and the buyer being able to spread the cost over time.
Amongst the areas with the tightest seller's markets are in the Washington DC area. This was confirmed by the Greater Capital Area Association of Realtors, in a report made by bizjournals.com. The DC area's prices had jumped by 5.8 percent from last year, with June registering the highest median price on record at $550,000 for a house or a condo in the area.
