When you’re in the heat of a hot housing market, stakes are higher as prices have skyrocketed and the pressure is on when shopping for your new home. Don’t fall victim to the pressure of a hot housing market. Instead, here are five don’ts you should steer clear from as well as what you should do instead when house hunting in a seller’s market.
1. Don’t allow desperation to get the best of you.
Imagine this: the first home you’re head over heels for goes from For Sale to Pending before you got to tour it with your realtor. We’ve all been there. The first ‘don’t’ you need to overcome is desperation. When you’re desperate to purchase your home, your judgement can become murky toward homebuying and can cause you to make an impulsive decision.
Do: Take your time to truly narrow down what you are looking for in a home and be patient with the process, no matter how long it may take.
2. Don’t be unprepared when looking at properties.
When looking at homes in a hot housing market, it’s important that you are prepared to make an offer that same day. Homes will go quickly, and the last thing you want is to see your dream home go under contract because you didn’t have your loan approved ahead of time.
Do: Save yourself from the heartache, and be prepared with all of the necessary documents you’ll need to make a standout offer.
3. Don’t ignore the current market trends.
In addition to taking a look at your finances, the future of your family, the security of your job and other factors, it’s also pertinent that you pay attention to the current market trends.
Do: Consult your realtor. Trends such as the duration that properties are on the market and which neighborhoods tend to sell quicker are great questions to start asking your realtor.
4. Don’t go into the process with a ballpark budget.
Homebuying is a major financial decision, and the last place you want to find yourself in is the stress of paying a mortgage, property tax and other items that are beyond what you can afford.
Do: Involve your financial adviser into the discussion when you’re planning your homebuying budget since your lender doesn’t take into account other monetary responsibilities such as savings, tuition, etc. Your advisor will also be able to clue you in on tax breaks if you’re a new homeowner.
5. Don’t overpay for your home.
A hot housing market will inevitably produce bidding wars on homes. And if this is the seventh home you’re placing and offer on after losing other bidding wars, this can put the pressure on you to start bidding for more than you can afford.
Do: Look at comparables for the home before you visit in order to make an even-keeled decision.
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