When real estate agents talk of a “low inventory” market, they usually refer to the amount of real estate listings for sale in the area. Sometimes, one area can have hundreds of homes for sale while others only a couple dozen. The Temecula area, in specific, has been suffering from a shortage of homes for the last couple years. Since the market only started regaining speed, homeowners have been slow to sell their house. Their fears of making a return investment or having strangers peek around their home has made them hesitant to sell. In result, Temecula has had a lower amount of homes on the market compared to the early 2000’s.
For buyers, this means 2 things: You either act quickly or you possibly lose the house you want to another buyer. Because of the real estate shortage, buyers are snatching up any open properties very quickly (sometimes before they even officially hit the market). So, in order to be a successful buyer in today’s real estate market, you must be ready in several ways. Here’s how you can be successful:
Have Your Finances Ready
In order to act immediately on a home for sale, you’ll need to have your finances in order. One tip we suggest is have a letter of qualification ready from a local lender. Show the homeowner you are qualified and ready to buy (and that they don’t have to worry about it later in the process). Also, you should prepare any funds you might need for an escrow deposit and show proof of funds. This will give you an unique advantage when making an offer on a house. The seller will see that you are already qualified, have the money, and ready to move in. If there’s multiple buyers, you’ll have a greater chance of being chosen by the seller, since you already have everything ready.
Know Your Situation
You must also be realistic about your situation. That means that you need to know, almost to the dollar, what your financial capabilities are: Down payment, maximum monthly payment, cash reserves for contingencies. You should monitor your finances carefully and be certain to change your projections if your needs or your finances change.
In looking at properties, you also need to be realistic about your needs, your desires, and your ability to make changes, both from an aesthetic standpoint as well as financially. You may find that you can overlook existing decor, but you cannot ignore structural problems. Conversely, you may see opportunities in a home with a less than perfect floor plan if it has a killer view.
Because home-shopping is such a subjective pursuit, no one can offer you a formula for assessing each property you visit. But with current market conditions, it is imperative that you decide in advance the kinds of concessions and compromises you can accept.
A Good Deal is a Done Deal
When demand is much greater than supply, there is a danger in waiting — thinking too long before writing an offer or insisting on seeing more options after you have seen one that is “almost perfect.” You should be prepared to act and you should give the seller a reason to act quickly on your offer. Terms are sometimes as important to a seller as the total dollar amount.
In today’s fluid real estate market, built-in buyer protections work to your advantage. The option and inspection periods will allow you an opportunity to perform due diligence, to get estimates for any necessary or desired work on the property, and to seek professional advice if required. Your goal, however, with the guidance of your real estate agent, should be to move swiftly from offer to contract and closing.