If You're Buying a House,The New England Market is Red Hot Right Now. Learn How to Navigate the Process

The housing market is on fire right now, and the New England region is the hottest of the hot! According to a National Association of Realtors study, because of pent-up post-pandemic demand for homes and a short supply of inventory, the median sales price of single-family homes is up 16.2% year-over-year in the first quarter. Along with high demand and low supply, other factors helping to move the market include historically low interest rates and a large market of first-time homebuyers.

New England is home to the top two real state markets in the country – Manchester and Concord, New Hampshire. Manchester is New Hampshire's largest city and no stranger to the hottest market list, while Concord leaped up 22 spots from last year to end up at number two.

According to Joelle Sturms, a realtor with the Masiello Group in Concord, New Hampshire office:

"It is pure madness! We are seeing multiple offers all over the place and homes selling for tens of thousands of dollars over the asking price. It is mostly buyers from Massachusetts, Connecticut, and New York with plenty of cash. They almost do not care what prices are. I feel bad for our local buyers because first-time homebuyers are getting priced out of the market."

So how can you win a bidding war when buying a house in the blazing New England Market?

Read on to learn more.

If You Are A Buyer in a Hot Market, Be Prepared to Wait

If you are buying a house, you might consider waiting until supply picks up; in fact, you might not have a choice. Here are three stats to help illustrate why waiting might be your best tactic.

• 64% of Active buyers in the first quarter of 2021 searched for their home for more than 90 days.
• In a typical market, the average time it took to find a home was 56 days.
• 45% of those buyers said that being outbid kept them from buying.

As a buyer, the worst thing you can do is rush into a hot seller's market needing to make a purchase. For example, if you are selling your home while looking for a new one, you might want to have a backup plan for where you will live if the process takes longer than expected. One tactic to consider is to negotiate a lease-back clause in your purchase and sales agreement. If you can eliminate the burden of time constraints and wait it out, saying "no, for now" might help you land a better deal!

Things to Do While Waiting...

In a market like New Hampshire today, even if you decide to wait before buying a house, you can prepare to move quickly when the market opens up. Here are some steps to take so you can move quickly when the time comes.

Get Pre-Approved

Obtaining a mortgage pre-approval letter shows sellers you are a serious buyer ready to make a deal. When you are pre-approved, it means that a lender has verified your financials and agreed to make a loan. Lining up financing takes time. Doing so ahead of time shows you are serious and can give you an edge over other buyers.

The process also gives you a better idea of what your homebuying budget looks like. You can then set realistic limits before you get into a bidding war.

Find Yourself A Good REALTOR®

Your REALTOR® is one of the most important members of your team. Find one who is an experienced negotiator but is also patient, objective, and resourceful. A good realtor can explain your local housing market using comps of similar properties that have recently sold, ideally in the neighborhood of your prospective home.

A well-placed nudge from your realtor is sometimes needed if you have unrealistic expectations. But you should never feel that they are trying to sway you or rush a decision.

Search for Homes Below Your Limit

Just because you are approved for a certain amount of financing does not mean you should only look at homes at the top of your budget. When buying a home in a hot market, expect to get outbid on many homes, especially in a seller's market. Instead, consider expanding your search and making concessions on the type of home you would like to own.

List your needs and wants for a home early in the process. It can help you to make better compromises later. For example, looking at homes in a different neighborhood, homes with fewer amenities, or needing some updates. In the end, any compromises will feel minor when you compare the monthly savings on your mortgage payments!

Keep the Inspection Process Simple

While it's never a good idea to waive a home inspection, as you may end up vulnerable if the home has undetected structural issues that can be expensive to repair. Instead, offer an "informational" inspection, which means you will not use the inspection as a negotiating tool for price concessions.

This offers the seller a good-faith gesture that you are interested in buying a house and not wasting their time. However, it also means, you can still walk away from any deal based on what the inspector finds.

In a Super Hot Market, Consider Deal-Sweeteners

Sometimes when buying a house, you need to look past the sticker price and see what is a priority to the seller. Maybe they are taking advantage of a hot market to increase their ROI but really don't want to move. Include a rent-back agreement with your bid allowing the homeowner to stay in the property for a few extra months. Or maybe the seller has to move in a hurry for their new job. You can offer to buy some of their big bulky furniture as part of the deal.

When buying a house, your job is to make the sale as painless as possible for the seller. If you look at the deal from both sides, you can often come up with ways to do that. The lack of inventory across the country has caused headaches for buyers finding themselves in a bidding war. If you think outside the box and make the transaction as painless as possible, then you can have a great chance of buying your dream home in a hot market like New Hampshire!