Spring is typically the busiest season for the real-estate market. But with limited inventory and high mortgage rates, purchasing a home remains an expensive and time-consuming process. MarketWatch spoke to three realtors about how home buyers can stand out from the competition.
Mortgage rates are double where they were a year ago, above 6.6%, and the number of homes for sale remains limited. The median price of an existing home in the U.S. was $359,000 as of January 2023, according to the National Realtors Association.
While buyers have a lot less competition to deal with today than during the pandemic, there simply aren’t that many options, real-estate agents say.
“Folks are looking for whatever they can get,” Reah Land Smith, a Realtor in Lake Keowee, S.C., told MarketWatch.
“It’s certainly becoming more of a buyers’ market than in 2021,” Sue Fox, a Realtor in Chapel Hill, N.C., said. “It’s definitely easier to buy a house now than it was a year or two ago – but it’s still hard in our area.” Fox said that multiple offers are still common in Raleigh, Durham and Chapel Hill.
“I encourage my buyers to let everyone in their social circle know about what they are looking for in their next home,” said Holly Stinson, a principal agent at Redfin
Somebody knows someone who owns your dream house and might be looking to sell it in the near future.”
But that doesn’t mean buyers are stuck. These tactics can give home buyers an edge should they stumble upon their dream home:
1. Choose your realtor wisely
The first piece of advice may induce some eye-rolling, but experts stress how important it is to hire a real-estate professional when looking for a home, especially if you’re looking in a new city or state.
Smith advises hiring hiring a true neighborhood real-estate professional. “Somebody that knows and understands the ins and outs of the community that they want to be a part of, “Smith said, “that has their ear to the ground, or may have overheard something at a Parent Teachers Association meeting that’s going to turn into a listing down the road.”
2. Use the internet to your advantage
Smith also recommended keeping a very close eye on listings, making sure to check them out quickly.
“You can’t look at the market once a week, once a day — you’ve got to have information on what is on the MLS,” she said. MLS stands for Multiple Listing Service, which is a private database created, maintained, and paid for by real-estate professionals to help clients buy and sell property.
Third-party sites like Realtor.com and Zillow
display these listings, but Smith said she sets her clients up with automated text or email alerts that notify potential buyers the moment a listing hits the market. “Only a real-estate professional that’s a member of the local MLS area does that,” Smith said, “so they’re right there first at the table.”
But if you want to take your internet skills to the next level, use social media to track down your dream home, Stinson said. “The power of social media is a real thing,” Stinson, who is based in the greater Seattle area, she added.
3. Check the home out in real life
With a little less competition than the pandemic years, Fox said that buyers should get in the car (or subway) to check out a home in the flesh.
Once buyers are prepared to purchase a home in less than six months, “they really do need to get in the car with somebody and start going around and taking a look at the interiors of the houses,” Fox said.
Buyers should consider questions like “what the layout is gonna be like, what are the interior fixtures like, do I want an older house or am I interested in new construction?” she said.
Some properties may look gorgeous online but the entire neighborhood wouldn’t have trees, she said. “It might have a beautiful kitchen, but if it’s just like a bald land with no trees, you wanna know that before you buy there,” Fox said.
This is where an experienced realtor will come in handy: They could look at some of the features of the house and see if they’re in good condition, and more. “You wanna have a good realtor there to help you weed through, and find the ones that are worth your time,” Fox stressed.
4. Consider renovating a home
Don’t be committed to an idea of a perfect, move-in ready home, said Fox.
Especially in markets where inventory is tight, she said people should consider what their trade-offs are.
“Everyone’s gonna rush after the cute house that’s adorable and renovated, and it’s gonna get 10 offers and sell for like $50,000 or $100,000 over the list price,” Fox said.
A savvy buyer would skip that house and look for a home that perhaps needs a bit of work but still has good bones, she added. “I’m gonna put $10,000 into it and make it look like a cute little house, but I’m gonna get it for less than the list price — and not have to compete against all these different buyers.”
She also urged buyers to consider living in a duplex or a townhome, which could be cheaper than a traditional single-family unit.
5. Be relentless and prepared
And finally, don’t get discouraged.
Go into the hunt fully prepared. “With multiple offers rearing their ugly face again, the importance of getting fully underwritten while submitting offers can help you win against competition,” Stinson said, “meaning an underwriter has approved the file which is a step further than the traditional pre-approval stage.”
Smith told buyers to be patient when scouring listings and viewing homes. “Be ready to pull the trigger when it’s time,” she said, “but it may take a couple of tries to secure the property that you’re looking for.”
“Don’t get discouraged,” Smith added.