Preparing to Buy a Home in Today's Market

If you've decided you're ready to buy a new home, you may be concerned about reports of low home inventory in today's housing market. According to Realtor.com, the number of active listings has decreased by 28.4% over the last year. In addition to the limited number of homes available for sale, increased housing prices and competition with other buyers can make it seem overwhelming to find your dream home in today's seller's market.

Whether you're buying your first home or you're a seasoned buyer, don't let the challenges of the current market discourage you from finding your next home. With preparation, flexibility, and creativity, your journey to homeownership is possible, even in a competitive market. 

To help you prepare to buy a home in today’s market, we asked Bryce Boyd, our Vice President of Lending, to share a few ways to increase your chances of successfully buying a new home in the current market.

Shop around for the best financing option.

We're currently seeing historically low mortgage rates, with various mortgage options available that make it more affordable for you to purchase a home. "Before you do anything, shop around for the best interest rate and mortgage loan terms. All mortgages are not created equal, so find the one that makes the most financial sense for you and your family," said Bryce.

For example, we offer 30, 15, and 10 Year Fixed Rate Mortgages, where your rate is the same for the life of the loan. We also offer a 5/5 Adjustable Rate Mortgage (ARM) that gives you the advantage of an exceptionally low rate for the first five years.* After that, a rate change could occur every five years. Again, knowing your budget will help you decide which option is best for you. 

Closing costs are another factor to consider when you're comparing financing options. "Most people don't realize that closing costs may differ with each financial institution. Therefore, take notice and make sure it's within range when comparing these costs to other financial institutions," said Bryce. 

Get pre-approved.

Once you've found the best interest rate and a loan term that meets your needs, but before you start searching for your new home, you'll want to get pre-approved by a lender. The pre-approval will tell you how much you're qualified to borrow, and most pre-approvals are good for 60 to 90 days. 

"Houses are selling quickly in today's market, and you have to be ready to move when the opportunity comes. A pre-approval letter is a good indication to the real estate agent that you're ready to buy a home. Also, it's important to have because most real estate agents will not show you a home unless you've been pre-approved first," said Bryce. 

There's no need to make an extra trip to the bank to get pre-approved. Most financial institutions offer the convenience of getting pre-approved online.

Hire an experienced real estate agent.

Don't go through this process without hiring an experienced real estate agent. Choose your real estate agent carefully by looking for a trustworthy agent with a proven track record. You'll likely have a better chance of finding a home with someone who knows the ins and outs of home buying and who will advocate for you during the entire process. They'll also know when new properties become available, which is essential in a market where offers are being made the same day the home is listed. 

Be flexible.

Are you willing to compromise? In a competitive market, be prepared to be flexible with your expectations. For example, you may have to compromise on your must-haves. Be open-minded because you may not be able to get everything you dream of having. Focus on what's important and be willing to compromise on everything else.

You'll also want to prepare yourself if the home seller is unwilling to provide repairs, warranties, or closing costs. "Getting a home inspection is always important, even in this competitive market. However, you may have to be flexible in addressing some issues found during the inspection. For example, don't let a broken lock or window be a deal-breaker for you getting the home," said Bryce.

You may also have to accommodate the seller's timeframe on a closing date or other circumstances they may be facing at the time.

Are you ready for a bidding war?

Are you prepared to pay more than the list price? You must be ready to compete against other potential buyers in a seller's market. There can be multiple offers on a home at the same time. There may also be buyers willing to pay cash or pay more than the asking price to win the deal.

“There’s very little room for negotiating (if any) compared to previous years. Not making your best offer could cost you the home you really want,” said Bryce. In a seller's market, typically, the sellers aren't motivated to make a counteroffer because of the attractive offers by potential buyers. So be ready to be aggressive with your offer.

Make yourself stand out.

With many buyers bidding on the same property, think about what you can do to stand out from the crowd. A seller's connection with and sentimental feelings about their home may be strong and hard to let go of. Writing a heartfelt letter or sending a picture or video expressing excitement about how much you're looking forward to taking care of the home may be the tie-breaker for the seller choosing your offer over another.

Consider delaying your purchase.

Consider the pros and cons of buying a home now versus waiting until later to purchase. If you don't have an immediate need to buy a home or are concerned you're not finding what you want, it might be worth waiting. According to Realtor.com, home inventory numbers are expected to grow 0.3% on average in 2022 and finally rebound from the all-time lows we've seen over the last few years. You may have a better chance of getting your dream home if you're willing to wait a few months to make your purchase.

Today’s housing market is highly competitive. Don't lose hope. It's still possible to find a home you can afford and love; all it takes is preparing yourself, being flexible, and positioning yourself to take action when the opportunity comes. Happy house hunting!

Ready to purchase your new home but don't know where to start? Download our Homebuyer's Checklist to help you with your home buying journey. 

*Available on primary residences located in the state of South Carolina. Qualification is subject to creditworthiness. Interest rates vary by product and are subject to change.