Priced Out of the Market? Here's What Every First Time Home Buyer Needs to Know

3 Tips

1. Create a Needs List

When markets are more competitive, it's essential to be as flexible as possible. Creating a needs list is a great way to identify what features you must have compared to what items you could live without.

Being proactive and only looking at properties that at minimum align with your core needs will help narrow your search and efforts to a few select properties that you can go all-in on. At the very least, it will help you understand what features you might be willing to compromise on.

Keep in mind that once you purchase a home, you can continually reinvest or do a cash-out refinance later to afford key home improvements that will allow you to enjoy your home more.

2. Fast Track Your Financing

Unless you are sitting on a stockpile of cash, chances are you will need a mortgage in order to purchase your first home. In fact, 87% of all buyers finance their home purchase. Play it smart and get pre-approved with our Cake Cash Pre Approval to make the purchase process much smoother.

Having your financing lined up before you start making offers on potential homes helps in a few ways, but most importantly, it demonstrates to a seller that you are a motivated buyer. This can give you an edge over competitors looking to score the same home.

Second, having a pre-approval letter broadens the number of properties you can tour. As COVID-19 continues to impact public health concern, many sellers may require a pre-approval letter before letting any potential buyer tour their home. Did you know you can get pre-approved with Cake in under 15 minutes.

Lastly, starting the mortgage application process early will help expedite the process once your offer has been accepted, allowing you to close even faster than those buyers who have to start from scratch.

3. Reduce Your Contingencies

When competing against multiple offers, many of whom are all-cash buyers, it can be challenging for your offer to stand out to a seller. One sure-fire way to improve your chances of having a seller accept your offer is to reduce your number of contingencies.

For example, if you have experience working in construction or trade industries, you might be satisfied with not electing for a home inspection based upon your own review of the property. Some sellers will even have a pre-listing inspection completed, which may ease your mind and make you more comfortable with the condition of the property.

Lastly, consider being genrous and not asking the seller to complete any repair work to the property, especially if it's mostly cosmetic.

Alternatively, elect to do these repairs yourself post-close or simply ask for a minor seller's credit to help offset future repairs costs. This will help expedite the transaction and get you and the seller to the closing table faster.

Cakes long story short: Preparing your finances and a strong pre-approval is key in a competitive housing market. Make sure you don't get stuck on home features and being a little flexible goes a long way. If you want to jump ahead of the pack, make sure you get a Cake Cash Pre Approval letter, making your offer as good as cash.