Is buying Dallas homes for sale on your to-do list in the coming months? The Dallas real estate market is currently very competitive, meaning there is a lack of inventory and more interested buyers than homes for sale. While this is excellent news for sellers, it can pose many challenges to those looking to buy. Fortunately, with the help of an experienced real estate agent and some preparation, you can still make your home-buying dreams come true. Here are some tips to help you out.
Know What You Need and Want
- What neighborhood you’d like to be in. Do you have your sights set on a particular school district? Want to be within walking distance of your office or amenities like bars and restaurants? If the neighborhood is one of your top priorities, make sure your agent knows.
- Fixer-upper or move-in ready. Are you willing to do some work to the home you buy, or do you want a home that has everything you need to settle in immediately?
- Price. Knowing your budget before looking at Dallas homes for sale is a must. Not only will this help your agent choose appropriate properties for you to look at, but it will also help you avoid the heartbreak of finding your dream home and then realizing you can’t afford to buy it.
Get Pre-Approved for FinancingIn a seller’s market, you need to get pre-approved for a loan before you start looking at homes for sale. This will not only give you a better idea of your budget, but it will also show the sellers you are serious about buying.
To get pre-approved, visit a mortgage lender that has been recommended by your Dallas real estate agent or with whom you’ve already established a relationship. They will check your credit history and score (620 or above is usually the score needed to obtain a conventional mortgage), debt-to-income ratio, and employment history. You’ll also need to show them proof of income as well as your assets and liabilities and provide other required documents such as your driver’s license and your Social Security number. Once you’ve been approved, you will get a letter that you can take with you when you begin looking at homes for sale in the area.
Make a Strong OfferThis type of market is not one where you can expect to score a deal. When you find a home that meets your needs, come out of the gates with a strong offer that is at or above the asking price and that drops common contingencies such as those based on obtaining financing or having the home appraisal come back at a certain amount. Keep in mind that not including contingencies could open you up to certain risks, so make sure you thoroughly discuss the consequences with your realtor before moving forward.
To make your offer even stronger, you may also want to increase the amount of earnest money you put down. Earnest money is a deposit that usually amounts to 1-2% of the purchase price of the home and shows you are a good-faith buyer. If you buy the house, the money will go toward your down payment. If you back out of the deal, the seller will keep the money. Increasing your earnest money and the amount of your down payment are both strategies that can help you compete in multiple-offer scenarios and give you a better chance of securing the deal.
Get Notified Early of ListingsHomes can fly off the market in a matter of days in this type of environment. The sooner you hear about listings, the better your chances of making an offer that will get accepted. While looking at the MLS or other listing services multiple times a day is one way to make sure you don’t miss a new listing, an even better way is to work with a local real estate agent who is well-connected in the community. Your agent can let you know when homes that match your criteria have been newly listed or will be listed soon. They may also be able to connect you with sellers who are offering their homes off-market, meaning they are still for sale but will not be promoted to the general public.
Be PatientWhile being prepared both mentally and financially to make a quick offer is a good idea, you also need to make sure you’re not jumping at a home you don’t really like (or that will stretch your budget) out of desperation. Prospective homebuyers who have lost out on several homes in a competitive market are often ready to jump at the next house that presents itself—even if it’s not really what they want. Be patient and understand that waiting a while is always preferable to getting into something that will lead to disappointment or financial hardship. If you’ve already sold your home and need a place to live, consider a short-term solution like renting a home to take the pressure off the search.
Buyers looking for homes in a competitive market can easily get frustrated or stressed when the search doesn’t go their way. By being prepared for whatever happens and working with an experienced local real estate agent, you can increase your chances of navigating a seller’s market successfully.
Ready to take the next step? Reach out to Steve Killingback for professional assistance.