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Chris Phillips

Branch Leader
Movement Mortgage
NMLS ID # 1927505

6 tips for buying a home in a low inventory market

By: Movement Team
April 17, 2024

Ever since the pandemic, America has been experiencing a low inventory market. BUT that hasn’t stopped people from buying new homes! With spring generally being a popular time for buyers to upgrade or relocate, many homes are selling within days of being listed.

Because homes are going so fast, prospective buyers don’t have much time to research available homes in their budget, make their offer and be chosen by the seller. This means it’s even more important to be prepared BEFORE going in so you can snatch up your dream home.

Tips for breaking through

So, how do you push past the competition to find and buy a home that you'll love? We pulled together six tips that can improve your chances of finding your dream home — even in this tight market — and possibly have a winning offer!

1 - BE INTENTIONAL ABOUT HOUSE HUNTING.

With the spring homebuying rush in full swing, some homes can be snatched up even before the listing's updated online, so it’s important to be intentional with your search. If you're serious about buying, try to make house hunting a priority so you don’t miss out on the right place. But even though there are fewer houses on the market, that doesn’t necessarily mean you have time to see them all (trust us, that’s still a lot of open houses). Remember to keep your budget in mind while you’re looking so you can see the best options for your situation.

Also, don’t worry if you can’t seem to find that “perfect home.” There are plenty of diamonds in the rough out there, just waiting to be turned into your dream home. So when you’re house hunting, try not to turn it down just because it doesn’t meet ALL of your criteria. Maybe keep the most important items on your “must-have” list in mind so you can be prepared to make a realistic decision while searching.

2 - SET YOURSELF UP FOR SUCCESS

Even with lots of competition, many buyers will still go to an open house without having first obtained a mortgage approval letter from their lender. A pre-approval means that a lender has thoroughly assessed your income, credit and general expenses and has determined what you can afford, given their underwriting guidelines. In essence, it is proof of a funding commitment and shows a seller that you are a serious buyer, are purchasing in your budget and have enough saved up to cover closing costs.

But remember, pre-approval is not the same as prequalification. If you put in an offer accompanied by just a prequalification letter, your offer doesn't carry as much weight. Prequalification assessment only indicates what you can afford based on what you "tell" your lender about your income and savings. It's not based on a deep dive into your finances by a professional underwriter. But an offer with an underwritten pre-approval letter shows you're a serious buyer and that you're able to close on the home faster than a buyer who is merely pre-qualified.

3 - CONSIDER LEAVING OUT CONTINGENCIES.

Even if you make a decent offer on a house, adding contingencies — like having to sell your current home before closing on a new one — might make your offer less desirable to the seller. But that doesn’t mean contingencies aren’t allowed. Many buyers still include them in their offer. However, with such little inventory, it might be worth considering an offer with few contingencies or none at all!

4 - MAKE A STRONG OFFER.

Because there isn’t much inventory in today’s market, when you do find a home you love, you’ll want to make a strong offer. If you bid below asking price, there’s a chance they’ll reject your offer and maybe even go with a higher one from someone else. BUT, before you make a higher offer, be sure you’re still within your monthly budget.

If the bidding gets too high on a home you're interested in, it may be time to look at your other options. However, sometimes it is worth bidding over asking price, if it’s within your budget. Just make sure you weigh your options before deciding to bid higher or walk away.

5 - CONSIDER A SOLID DOWN PAYMENT.

Bigger down payments are often attractive to sellers. According to the National Association of Realtors, the average down payment on a house or condo in 2022 was 6%. And many people put down even less money – or no money at all.

There are many reasons that sellers love offers with larger down payments, especially since most believe that a buyer with a larger down payment will make for a seamless process. The smoother you can make this transaction, the better for everyone involved. So consider making an offer with a solid down payment—within your limits, of course.

That said, some sellers will also be empathetic to those without huge bank accounts — they may have once been in your shoes. For many homebuyers, saving up for a down payment is not easy, especially in today's higher-priced market. We recommend chatting with your loan officer to determine if you qualify for loans with lower down payment thresholds. Several programs available to qualified borrowers can help, and some programs are not just limited to low-income or first-time buyers.

6 - LOOK FOR A DIAMOND IN THE ROUGH.

Have you ever googled some keywords and not found what you want in the search results? You then probably added a few extra words to broaden your search. The same strategy works when you're buying a home. If you're not finding what you want (or getting outbid on a property you have your heart set on), consider properties just outside of the in-demand neighborhood you're focused on or look at houses that may need some TLC. You might just find a place with great potential to become the perfect home.

Homes that require investing in a few upgrades are worth looking into — especially since other buyers will probably pass them over. But if you’re willing to take on a few renovation projects, your dream home may be closer than you thought. Plus, when qualified borrowers use a renovation loan, you can purchase your new home AND finance the necessary renovations all with one loan!

You’ve got this!

We hope our six tips can help you submit a winning offer for your dream home. Finding the right place in a great location might take some strategic maneuvering in this tight market, but with smart financial planning, understanding what moves your competition and what motivates your seller could be the key to success.

Ready to move forward? Contact a Movement loan officer near you to learn about our 6-7-1 process, which features a six-hour goal for an underwritten approval decision, a seven-day goal that gets closing documents out weeks before closing to help avoid last-minute confusion and we aim to close in just one day*.

*While it is Movement Mortgage's goal to provide underwriting results within six hours of receiving an application, process loans in seven days and close in one day, extenuating circumstances may cause delays outside of this window.

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Author: Movement Team

About Movement Mortgage, LLC (“Movement”)

Movement is not just a mortgage company – they’re an Impact Lender and force for positive change. With more than 4,000 teammates across all 50 states, they reinvest the majority of our profits back into the communities they serve. Movement is the 10th ranked top-producing residential mortgage company in the U.S., funding more than $20 billion in residential mortgages annually. The company has contributed nearly $400 million to the Movement Foundation since 2012, funding the Movement Schools network, affordable housing projects and global outreach efforts. For more information on Movement and Impact Lending, visit movement.com/impactreport .

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Chris Phillips
Branch Leader
Wondering how much home you can afford? Let’s talk about your next move!
5651 Whitesville Rd, Ste 105, Columbus, GA 31904
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NMLS # 1927505

State License #AL-75004, GA-71213, NC-I-218025