If you’re in the market for a new home in Maryland, you may have noticed how competitive the situation is right now. There are quite a few buyers out there rushing to take advantage of historically low-interest rates (hovering around 3%), but inventory is very low at the same time, so not everyone can get what they want.
There’s no denying that it’s a great time to take out a mortgage on a home, but how can you maximize your chance of success during a competitive bidding process?
I have a few tips that will do that for you:
- Don’t use an online lender.
- The fewer contingencies you take, the better your chances.
- Ask to be a back-up offer.
Online lenders will promise you the world based on the information you give them over the phone. You’ll be Pre-Approved, which is a status that results in a false sense of security for many would-be home buyers.
What can happen is that you’ll win the bid, but your loan fails at a key moment in the deal, and ultimately the house will go to someone else while you’re stuck trying to get in contact with your lender. Knowing this is likely, you may lose the bid because the realtor in charge of selling the house will prefer another buyer who has a more reputable, local lender. This is why I highly recommend getting your loan with someone local, and reputable.
This is not to say that you shouldn’t have any contingencies, but if you’re looking for ways to increase the likelihood of winning the bid, this is how you can bag the seller’s attention. You may have to take care of some repairs or leaky pipes once the deal is done, but with interest rates as low as they are, it is possible to strike an excellent deal despite this.
I always tell my clients to set their expectations. In a competitive market, it can be difficult to win the bid on your first love. While losing a bid can be discouraging, miracles do happen, and asking to be a back-up offer is what makes those miracles possible.
Remember that the buyers who won the bid can lose their deal for many reasons, including loan or contingency issues, so it pays to make your interest known and to be in the right place in case that happens.
Bonus tip: Work with a pro!
There is no substitute for experience, and with my 30+ years working real estate in Gaithersburg, I have a lot to bring to your house hunt. If you’d like more tips on buying a home, or you’d like to enlist my help, my consultations are completely free with no obligations.