Persicketti: How home buyers should approach a tight housing market – The Herald

Matt Persicketti – Three Rivers Association of Realtors President

Because real estate is a commodity where values fluctuate according to supply and demand, prices tend to rise when inventory is low.

That’s the situation faced by today’s buyers who are attempting to purchase a home.

In fact, National Association of Realtors chief economist Lawrence Yun has been quoted as saying “demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.”

There are things one can do to help get through the buying process in a tight inventory market with as little stress and difficulty as possible.

Before beginning to look at homes, the first thing you need to do is to meet with one or more lenders to get a preapproval letter which indicates the price range of the homes you should be looking at. Keep in mind that what the lender states you can afford and the price range with a payment you are comfortable with may be two different things.

So, it is important to determine a final budget, stick to it and be prepared to walk away if the asking price surpasses your budget.

When determining your budget, make sure you take into account additional costs of ownership such as taxes, utilities and insurance. Once you begin your search, try to concentrate on your needs versus your wants.

In other words, you can compromise on certain wants, such as hardwood floors or stainless steel appliances, that can be added later whereas a particular school district or large backyard may be things you want to emphasize in your search.

In this type of market, homes do not remain available that long. So, you must be prepared to make a quick decision or risk missing out on the home altogether.

You should also resist the temptation to submit a low offer as a starting bid. Rather your offer should reflect what you are willing to pay (or very close to it) because, in many instances, you can be faced with a multiple-offer situation.

In the case of multiple offers, the seller is not necessarily looking for the highest offer, but the best offer.It can come down to conditions attached to the offer, such as flexibility on closing time.

You may also consider waiving certain contingencies or showing your seriousness by putting down a higher earnest deposit.The reputation of your lender can also be a factor.

Lastly, it is important to work with a local Realtor who is a member of the National Association of Realtors and knows areas and neighborhoods that you are considering.

• Matt Persicketti is president of the Three Rivers Association of Realtors.

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