In 2020, most of New Jersey was a seller’s market, with the demand for homes far exceeding the supply. This has led to significant increases in home prices, as well as tight competition for available properties.
If you’re looking to buy a home in 2021, be prepared to face similar challenges. While home buying activities are expected to ease a little and more homes are expected to be put up for sale, experts are predicting it will still be a seller’s market.
- Put in an offer fast
A house for sale in Lawrence, NJ or other hot seller’s markets in New Jersey will not stay on the market for long. It’s likely to be lapped up by buyers fast. This means you shouldn’t lose time in making the decision to put in an offer.
This is not to say you shouldn’t do your research about the home or the neighborhood. To avoid getting caught off guard, it’s important to start early and learn as much as you can about a neighborhood you’ve set your eyes on.
Get information on schools, nearby grocery stores, transportation, and other details that are important to you. Go around the neighborhood and get a feel of how it is to live in the area.
Once you’re convinced it’s the right community for you, work with your agent in finding prospective homes fast and arranging home viewings of the properties you’re interested in. Get as much information as you can about these homes, such as property reports, disclosures, and sellers’ contingencies, to guide you in making your decisions.
- Be prepared with your financial information
It’s best to get mortgage pre-approval even before going home shopping. The amount you’re pre-approved for can serve as your guide in setting a budget. Moreover, many sellers will only consider a bid from a buyer with pre-approval, which is typically attached to the offer letter.
Pre-approval can also help make your final mortgage application go faster, as the lender would already have most of the documentation and information they need. While pre-approval does not guarantee final approval, it increases the chances for it and helps speed up the process.
- Put in a strong offer
A seller’s market does not leave much room for negotiations, so low balling can cost you the home. Start with a strong offer that the seller will find difficult to ignore.
Consult your Realtor about the right offer price and any pricing strategy. If you can afford it, consider offering the seller’s listing price, or even a little above it. Or, if you think the seller has overpriced, offer what would be reasonable but competitive based on comparable sales in the neighborhood.
- Avoid too many contingencies
Avoid having too many contingencies that the seller might see as roadblocks to closing the sale, such as selling your home first before closing. If a seller receives another offer with fewer contingencies, there’s a good chance they’ll choose that offer over yours.
Make sure, however, that you are comfortable with what you’re giving up. If you waive a home inspection, for instance, you may not hold the seller responsible for any problem that might be found down the road.
Weigh what you think is fair and what’s realistic for you, and don’t agree to compromises that will cost you your peace of mind.
- Sweeten your offer
Give the seller more reasons to choose your bid by adding sweeteners or incentives, such as a check for your earnest money deposit, or leaving the closing date open so the seller can set it themselves. As much as possible, agree to the seller’s contingencies unless you feel that it would put you in a real disadvantage.
In addition, consider writing an offer letter to appeal to the seller’s emotions. Write why you think you’re the right buyer for their home, and what you like most about it. Keep in mind that the seller has likely developed an emotional connection to the property and would want to make sure they’re leaving it in good hands.
- Consider a new construction home
If there’s too much competition for an existing home, you might want to consider the alternative of buying a new construction property This can mean waiting a few months for the home to be completed, but new construction also offers quite a few benefits.
For example, you can spread out your down payment and not have to pay in one go. You may also choose the floorplan and have the option to customize certain features. A new construction home also typically comes with a warranty for two to ten years, or more. And since it comes with all new materials, you’ll have very little maintenance needs, at least in the first three to five years.
Get the home of your dreams in New Jersey with expert help
We at David DePaola & Company have the knowhow and experience to help you close the best possible sale for the perfect home in any market. Call us today at 609.883.4161 or send us an email at david(at)depaola(dotted)com to get started.