Many families have found their savings accounts a little fatter over the last two years, thanks to remote working, less commuting and more cooking at home versus dining out. If that sounds like you, and you're in the market to buy a new home, you might find that new construction fits — maybe for the first time — in your budget. 

What is a “seller's market”? It's when homes are scarce for sale but plenty of potential buyers. This can lead to open houses that feel more like Black-Friday sales (or Covid testing queues), desperate FOMO-based decision-making and multiple offers on homes you wouldn't usually be so excited about. Like the term alludes to, it's the seller who benefits in a seller's market. 

Ever since the pandemic began, America has been in a low inventory situation, with small towns and cities and warmer climates (think Florida and Texas) bursting at the seams with buyers relocating and looking for a new place to put down roots. In the hottest markets, homes are selling within days of being listed. This gives prospective buyers very little time to research available homes, make a bid and be chosen by ever-picky sellers. 

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 seven tips that can improve your chances that you'll find a dream home — even in this tight market — and have the winning offer! 

1. DON'T BE CASUAL ABOUT HOUSEHUNTING.

The housing market is crazy right now, and homes can be snatched up before the listing's even updated online, so you can't be too casual in your search. If you're serious about buying, house hunting needs to be a priority, not a hobby. Remember, even though fewer houses are on the market, you can't expect to see them all. Be mindful that you need to get out of your own way so that when you find a home that fits your budget, you won't feel compelled to see everything else listed in the area before making an offer. 

We all know that the perfect home does not exist – even if the home design magazines and makeover TV shows tell you they do. No single home will ever satisfy everything on your “must-have” checklist, so don't hold out waiting for one that will. Instead, check new listings regularly, be prepared to drop everything to view a home as soon as it hits the market and put yourself in the frame of mind where you can make a quick decision when you find one that meets most of your needs. 

2. BE TAKEN SERIOUSLY.

Even with such still competition, many buyers will still go to an open house or walk-through 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. 

Now don't mistake a pre-approval with a 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 your income and saving are. It's not based on a deep dive into your finances by a professional underwriter. But an offer with an underwritten pre-approval shows you're a serious buyer and that you're able to close on the home faster — and with fewer hiccups — than a buyer who is merely pre-qualified. 

3. COUNT OUT CONTINGENCIES.

Even if you make a decent offer on a house, adding contingencies — like having to sell your current home before closing on the one you'd like to buy — will likely push your offer to the bottom of the pile. There's no bigger turn-off to sellers. Still, many homebuyers include contingencies with an offer, often petty ones. It's not a move for the faint of heart, but with such scarce little inventory at the moment, making a contingency-free offer tells the seller you're earnest and eager to get this deal done. 

4. DON'T YOU DARE LOWBALL.

How many times do we have to say it? It's a seller's market, and for the time being, there is not a lot of inventory out there to choose from. So if you're serious about buying a new home, don't play hardball. Sure, you can bid for lower than asking but you may not get a call back. Many homes are going for the asking price (and more) within a few days (sometimes hours) of being listed. So be smart about it. Make sure your bid will keep you within a monthly budget you can afford and prepare for a bidding war if the property is a charmer. 

Remember, the old rules no longer apply: making an offer that's 10% below the asking price — which used to be the norm — can insult the seller, who will then gladly turn down your offer. One last thing: don't get emotional about the place. If the bidding war ramps up and pushes out of the bounds of your budget, step away. 

5. BREAK OPEN YOUR PIGGYBANK.

The fact is that bigger down payments are VERY attractive to sellers. According to the National Association of Realtors, the average down payment on a house or condo in 2021 was just 12%. For homebuyers under age 30, it was just 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, not the least of which is the belief that a buyer with a larger down payment will be a smoother sale and will stick to the closing date. The smoother you can make this transaction, and nothing greases the wheels like money, the better for all. So make an offer with the highest down payment that you can muster — within your limits, of course, don't go broke doing it. 

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. So make sure you chat with a loan officer to determine if you qualify for loans with lower down payment thresholds. Several programs available nationwide can help, and they're not just limited to low-income or first-time buyers. 

6. CONSIDER THE UGLY DUCKLING.

Have you ever googled some keywords and not found what you want in the search results? You 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 remodeling or renovations. You might find the perfect home when you lower your expectations to 85 or 90% of what you “must-have.” 

Homes that require investing in a few upgrades to bring it up to your standards are worth looking into — especially since perfectionists will probably pass them over. Many buyers can't see past even a small home renovation, but if you can deal with a bit of sawdust and hammers banging for a few weeks, your dream home — maybe even with a new kitchen or bath — could be right in front of you. You just have to open your eyes — and your imagination. Work with your lender to see if you can factor contractor costs into your financing plans. 

7. GET PERSONAL

When a seller is getting multiple offers, all tend to look the same — the only difference is the bid amount. So how can you make yours stand out — even if your offer is as good as the others? An offer letter. 

A personal note, written directly to the seller detailing why you feel in your heart of hearts that their home is perfect for your family, could be just the thing that sets your offer apart from any others. 

Connect with the seller emotionally. Tell them how you fell in love with their home, that you'd love to be the caretaker of their memories and why they'll be so happy that they chose you as a buyer. Tug on their heartstrings – after all, they once fell in love with the house too — but don't get too sappy and be sure to keep it short and sweet. Finally, consider adding a family photo. After all, a picture is worth 1,000 words. 

Get going and good luck! 

We hope our seven tips help you find the home you want and submit an attractive, winning offer. Finding a great home in a great location will take some strategic maneuvering in this tight market, but a combination of smart financial plans, understanding what moves your competition and what motivates your seller will help you get the keys to your new place. 

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 avoid last-minute confusion and a typical closing in just one day*. Let's talk soon! 

*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.