These are exciting times with real estate in the Pikes Peak Region. The Colorado Springs and surrounding areas are booming! We are experiencing a shortage of inventory in both the rental and resale markets coupled with a strong demand to get into both. At a time where rental rates are increasing and interest rates remain at historic lows many people are finding that it makes more sense to financially own a home rather than rent and are jumping in before interest rates start to rise again. With that in mind, new home owners can expect a lot of competition when buying a home under $300k. So what can you do to help prepare for your home search and position yourself to get an accepted offer?
Cash is king, however, if you will be financing your home purchase then you need to contact a Mortgage Lender right away.
You will be required to submit a Lender Letter with your offer to show that you have been pre-qualified with a Lender to obtain financing. It does not take much to get an initial pre-qualification from the lender however if you can work with the lender to get a full pre-approval through underwriting then your position will be much stronger as it demonstrates to the Seller that your transaction with them has a better chance of closing. Also, the more money you are able to put down on your loan at closing the more solid your position will look as well.
Consider purchasing a newly constructed home.
If your budget allows, there are many benefits to buying a newly constructed home. Aside from the obvious fact that you will be the first person to live in the home, if you get in with the builder early enough you may get the opportunity to add personal touches to the home by choosing the floor plan you like best and some of the finishes you want in your home. Builders may have some spec homes available that are already in the construction phase and could be available very quickly for move in or you can reserve a lot and begin from the ground up. The greatest advantage in this market to a new home build is that the Builders do not entertain multiple offers. Homes are sold on a first come first serve basis. The price is not negotiable and will only be impacted based on the upgrades you choose. Typically these homes do not include a landscaping plan. Most communities will require you to submit an approved landscaping plan and implement it within a few months after the build is complete so you do need to factor that into your budget as well. You should also expect to live in a construction zone area for a while but in the end you will have a beautiful home in an up and coming community.
In a multiple offer situation, what can you offer the Seller over other potential Buyers?
Don’t be surprised if you see a home is listed much higher than recently sold homes in the area. Unfortunately the lack of inventory in the area coupled with high demand is pushing the price of homes upward. We will review comparable sold homes but in most cases and under reasonable circumstances you will want to consider offering, at a minimum, full list price with no seller concessions (or closing costs). In many instances it may be best to go in above list price and add in other incentives for the Seller. The days of coming in low have gone away and is the quickest way to get booted out of the competition. Of course there are exceptions and you can explore those options if that situation presents itself.
If you are interested in learning more about how you can best position yourself for your next home purchase, give me a call at 719-210-8878. I am happy to partner with you so that you can achieve your goal of home ownership!