The Curious Case of Seller’s Markets: How First-Time Buyers Can Still Secure Their Dream Home

By Chuck MacPhee

It was 2005.

I was two years out of college, had a great consulting job, traveled the country, and got married. So what do you think the first thing this financially stable, 20-something newlywed did? Well, he fulfilled the all-American dream and purchased a home, of course.

For me, owning my own home was a childhood dream. I literally grew up in the shadow of the real estate industry—my mother was a REALTOR® and my father a homebuilder—so naturally, I thought I knew everything about purchasing a home. What happened next completely proved me wrong …

For several months, my wife and I searched the for-sale properties in Brookhaven, an area just outside of Atlanta. We slowly combed through neighborhoods, thinking we had all the time in the world. But when it was finally serious decision-making time, we promptly lost nine homes to other buyers, and quickly learned just how fast we needed to move. It was a trying and emotional time for us, filled with the highs of thinking we had found our perfect property and the lows of realizing someone else had already scooped it up. Then, with the help of a freak Atlanta ice storm and some powerful four-wheel drive, we happened to spot a newly listed house in Brookhaven. Nobody was on the road that day. Nobody had seen the house. In fact, the sign had been put out the night before. Even through the ice, we were able to read the contact information on the sign and the contract was written up that very day.

Now, don’t get me wrong. I’m not saying you need a random ice storm and a powerful car to literally clear the road to your brand-new home. There are definitely easier—and less treacherous—ways to find a house. However, I am saying that with true seller’s markets popping up from coast to coast, it’s important to be prepared so that when you do see your perfect home, you’re ready to put an offer on the table, no ice storms or four-wheel drive required.

So, what should you know?

1. Find a professional
Make sure you are working with true professionals during every step of the home buying process. Unfortunately, when markets heat up, there are people out there who may not have your best interests in mind, so make sure you are working with the best and most importantly, working with professionals you can trust. What makes up your real estate entourage, you ask? Here are few key players:

• REALTOR®
• Mortgage Lender
• Closing Attorney / Title Company
• Home Inspectors
• Surveyors
• Pest Control Professionals

2. Know your numbers
It’s important to know what’s on your credit report and what your credit score is. You don’t want any surprises to arise as you work out your home financing. Also, if there is an inaccuracy on your report, you’ll want to fix that before earnest money or a deposit is on the line.

3. Work with a lender
As soon as you know you’re ready to buy a home, start working with a trusted lender. This will not only make sure you establish buying power and a monthly budget but will also give you a jump-start on the loan application/underwriting process. There are many loan options out there to help you meet your goals, so start these discussions early so you know all your available options and which loan will best meet your needs. This will also give you a huge advantage when it comes time to submit an offer. Most buyers submit offers using pre-approvals or a prequalification but in many cases, these documents aren’t worth much. Why not differentiate yourself from the rest with a fully underwritten, conditional loan approval? With this in hand, your REALTOR® will have the ability to strategically structure your offer so it contains shorter financing contingencies, and potentially, shorter closing time frames.

4. Think big
Focus on the big picture; small cosmetic fixes can be changed over time and really shouldn’t be deal breakers—or makers—when deciding on a home. Instead, think about the structure and layout of the house and make sure it works for you. Cheesy as it sounds, it takes time to turn a house into a home. And if you’re still set on remodeling, consider loan programs that help finance renovation costs and bundle everything into one loan.

5. Be patient
It’s pretty ironic that I suggest patience when I just finished telling you about how my wife and I bought our home the same day we saw it. Still, patience in real estate is really a virtue. Don’t settle. You’ll know when a home is right. And when it is, you’ll feel that pure homebuyer joy and excitement that can only come from the hard-earned fulfillment of a lifelong dream.

CHUCK MACPHEE is a licensed REALTOR® with Berkshire Hathaway HomeServices Georgia Properties. He’s also a luxury homes specialist and member of the REthink Council. Visit his website: www.aliciamacphee.com or find him on Facebook or Twitter @ChuckMacPhee.