2. Get Pre-Approved with a Direct, Local Lender. The type of lender you utilize also makes a huge difference in the strength of your offer and ability to win homes, in addition to your long-term financial strategy. Choosing a direct, local lender will give you the best shot at your primary goal, winning the home. This is because direct, local lender can typically offer the best terms for an offer such as a shorter escrow time, shorter appraisals with local, trusted appraisers, and shorter loan contingencies. A good, local lender will also coach you, tend to have a proven track record with local agents, and they’ll often help your agent pitch you as the right buyer. Rates and loan terms also matter and should be taken into consideration but are usually competitive.

3. Take an extra step and get DU approval (or similar). After pre-approval, you can also ask your lender to go ahead and give you desktop underwriting approval / full loan approval. This can take extra time and effort, but it ensures your loan is already guaranteed and frees you from needing to have a loan contingency…making your offer essentially as good as cash. In a market flooded with cash offers, which are not always the best, having full loan approval lets you be as competitive as possible. The new RPA, released in December 2021, also allows your agent to check off a box and easily show you have DU approval when submitting your offer.

4. Do your diligence. Research market trends in the area you like, focusing on general sales from the past 3 months (digging back further as needed). Your agent can provide you with data that can show you average list prices vs. sale prices, so you can know what to expect in terms of marketing vs. actual sales data. This is good to do in general, but also specifically look at comparable sales for the home you want to bid on together. Do also spend time in the areas you like, get to know the streets and culture, so that you are sure and confident up front it’s somewhere you want to live and can afford to live too. You may find you need to be open to other areas that you can live in and grow with. Also, your agent can advise you if there are disclosures, online records, inspection reports, etc. that you can review to get a full understanding of the property up front. In some cases, you might want to bring an expert with you to a showing to look over a property with you before bidding.

5. Be aggressive in offering. Be aware that many sellers hope and expect their homes to go completely “as is” in this market at a high price, and so you need to be as aggressive as possible in every way. Some buyers will come in non-contingent on properties – almost always, appraisal and loan contingencies are removed on top properties – and that can be tough to beat, so just do the very best you can. There are ways you can still be protected yet be very aggressive with inspection contingencies, and a good agent can guide you along in that. In this market, do be prepared to match or beat the very best comp on every mediocre or better property you pursue. Due to the inventory shortage, buyers are going all-out just to get something. Consider pursuing modest properties that still meet your needs. If 60% of your needs are met with a property, that’s usually a realistic purchase. On good to great properties, such as aspirational properties with unique architectural features, a view, or an emotional X factor,  usually the property you’re bidding on will be the new comp in the area, so pursue it accordingly (with all you’ve got!).