The moment has arrived! You’ve found that home that you love and can’t wait to put an offer on it. You, your partner, if applicable, and maybe even a family have envisioned a life there and have come to the decision together that this is it, this is your home.
And then, just like that, those dreams are ripped out from under you. The house has been sold before you even had a chance to put an offer on it.
This is the reality for many people in New Zealand, and across the world in highly competitive markets. Housing in many areas is literally selling before people even have a chance to see the advertisement, and the demand for houses continues to grow and grow. In New Zealand specifically, the housing shortage is at all time highs, to the point where the NZ government is actually putting some serious action into building more. Have a look at this article about the government’s housing plans if you’re interested.
Regardless of the country you live in, buying in a competitive market is really difficult and exhausting. Even harder than buying in competitive markets, is buying your very first home in a competitive market. Since you are already at a disadvantage by having less experience and potentially less knowledge than a person who has already bought a house, we’ve compiled 7 of the best tips for beating out the competition and securing your first home.
- Be prepared financially
This is by far the most important tip to securing your first home. Sellers will want to know that you’ve got all your finances in order and ready to go before they sell to you. If you don’t, there’s a metaphorical line out the door of buyers who do, and are ready to jump on the opportunity. Don’t be the complacent buyer who isn’t ready to buy at any moment.
First up to being prepared is to secure your loan. Make sure your credit score is done, and you’ve gathered your bank statements, tax documents, and other financial documents necessary to show the full picture of your financial status to your lender.
What you’re looking for is a pre approval from your lender to be able to show the seller. The final approval comes with an appraisal of the home you want to buy, so focus on this pre approval step for now. Pre approval will tell you how much money you’re going to be able to spend, which will obviously sort out houses for you quite easily by price.
When you go in to make an offer on the house, you’ll need to have all these parts of your loan ready to go, as well as have references prepared and documents in hand. Have your property law solicitor on speed dial to draw up any initial paperwork. Showing that you can move fast and are already good to go will be enticing to the seller. Make sure that you keep a solicitor conveyancing team available to help you through the paperwork of the initial offer to ensure it’s a fair and legal offer.
- Find a good agent (or multiple!)
Finding an agent is imperative to getting ahead of the normal market. Imagine this, the seller decides to go ahead and put their house on the market and contacts an agent. Before the agent can even put the security lock on the house and go back to the office to type up the listing for the online site, another agent may have already phoned their clients and set up a viewing tomorrow morning.
Find an agent that you can trust to call you immediately will get you a head start on houses that aren’t even on the market. Finding one that you can trust on top of that, and who will always give you the honest answer on the state of the home, well that’s gold.
- Consider areas you wouldn’t normally
A competitive market means that you might have to make some sacrifices on the area that you want to buy in. Seriously consider how much you want to live in that specific neighborhood, or even that specific town. Think about other options that might save you quite a bit of money, like looking at farmland for sale that you might be able to build on.
- Consider waiting, renting now
You probably don’t want to hear this one, but waiting might be your best option if prices are out of control. Consider contacting a rental property manager and see if there’s a home that fits your needs that you can rent or even lease to own.
On the other hand, you do have a slight jump ahead on those people who already have a home that they need to deal with when buying a new home. For example, they may need to consider using their old property as a rental unit, and will probably also be busy working with a rental management service to sort the old house out. Keep this in mind as well.
- Use multiple methods of communication
As mentioned, real estate agents might already have potentially sold a home before the listing is even on the internet. Because of that, you’ll want to make sure you and your agents have all types of communication to stay in touch with each other. Provide your cell phone, home phone, email, work number, and actually be available to them at all times.
- Be reasonable with prices
It is a seller’s market, and at some point you are just going to have to accept that if you want to buy now. This means accepting that you’ll be paying more money than in a buyer’s market, and more than you would like to spend in general.
- Be patient
You are about to dive in to the high high’s, and the very low low’s of the seller’s market. Whether you follow any of this advice or not, make sure that the one thing you do is remain patient, optimistic, and you will eventually find the house that fits you.