If you are thinking about buying a home or condo in 2021, you should start preparing today.
The real estate market is moving quickly. Inventory is constrained and demand is strong in the Philly area, especially for rowhomes and single family houses in surrounding suburbs. If a property is priced fairly when it hits the market, it is likely to sell above the asking price and rapidly - in just a matter of days.
Fret not. You’ve still got a chance. Buyers just need to be prepared and have their ducks in a row so they’re ready to go when the time comes. Prevu is here to help!
Below we outline a few expert tips on what you can do to be ready to buy in 2021.
Show you are financially qualified
In order to submit a serious offer, you must show the seller and listing agent that you are a qualified buyer. This includes having a pre-approval letter from your mortgage lender as well as a buyer financial statement, sometimes referred to as the BFI in Philadelphia.
A pre-approval is not the same as a pre-qualification, so make sure you secure a pre-approval. The pre-approval means that your lender has vetted you, your creditworthiness, and your financial documents. This stamp of approval is more significant than a pre-qualification letter, which only estimates based on inputs on a preliminary form.
The buyer financial statement (BFI) is a self-certified document where buyers disclose a list of assets, income and liabilities in one place so a seller and their agent can make an informed decision about selling them the property .
Remember it’s not just about price. Demonstrating your financial strength as a buyer can give a seller confidence you’ll be able to successfully close the deal instead of someone else.
Get cash back with a commission rebate
Philadelphia home buyers can save thousands on their purchase by selecting a broker that offers a commission rebate. Prevu, a tech-enabled brokerage in Philly, gives buyers up to 2% of their purchase price back with the company’s innovative Smart Buyer Rebate Program.
That’s extra money to offset closing costs, furnish your new home, or replenish the savings you used for your down payment.
View properties when they hit the market
This seems too simple to be true, but viewing properties as soon as they are listed is crucial to win your dream home in a competitive market. It’s so simple that many people overlook this strategy.
If you can get in the same day a property is listed and make a competitive offer right after, you might convince a seller to take the home off the market and sign your contract. This can prevent it from going to a bidding war.
We recognize that not everyone has a schedule that allows them to tour a home at the drop of a hat during the week. But if you can squeeze in a house tour or two on a lunch break, that might just give you enough time to tie up a great home before weekend open houses.
Stay ahead of the competition by making sure you are up to date on the newest listings. Prevu’s digital platform automatically sends you property alerts for new listings that match your search criteria. In addition, when a property catches your eye on Prevu, you can conveniently request a tour with the click of a button from any listing.
These helpful features save you time and make it easier to visit a new Philly property before someone else does.
Play to win
In a tight and competitive market such as the one we are seeing now -- and which shows no signs of abating -- be ready to pay up for a property you really want.
Bidding wars are common in a seller’s market. Admittedly, it doesn’t sound fun to pay $520,000 for a home that is listed at $500,000, but people are regularly doing just that to win amid low inventory of listings.
While paying a big premium may feel uncomfortable, sometimes all it takes is $5,000 or $10,000 to get the seller’s attention, so keep it in mind as a good strategy if you need to be aggressive. With interest rates as low as they are, adding $10,000 on the mortgage equates to only an extra $42 per month or so, assuming a 3.0% interest rate. A small price to pay to avoid missing out on your dream home
Be flexible with terms
It’s not just about price so consider giving in on a few non-financial terms in order to make your offer more attractive. Foregoing a home inspection contingency or a financing contingency are two examples of ways to make your offer standout.
Please check with your agent, however, as these strategies have some additional risks to consider. So be sure to know what you’re getting into if you go this route!
Get ready for 2021
While we don’t have a crystal ball, we believe that the real estate market in 2021 will likely remain competitive like 2020. So make sure you are set to go. Get your pre-approval ready, stay on top of new listings, tour properties as soon as possible, and play to win.
Interested in buying in 2021? Sign up for Prevu’s free property alerts today.