Buying a Home in a Seller’s Market

This Article Is About Shopping For A Home And Mortgage During A Sellers Market, Many homebuyers often get discouraged when buying a home with dozens of serious homebuyers during a hot booming housing market. The current trend is renters pulling the trigger to get qualified and enter the home purchase market. The pulse of a homebuyer currently in the market is to no longer wait and to buy a home.

The Strong Competition In The Housing Market

If you are currently trying to purchase a home, there is a good chance you have been trying for quite some time. The current housing market across the United States is on fire. In this blog, we will give a current update on trends we are seeing throughout the real estate market, as well as a personal home buying story. This blog will include facts as well as opinions. If you are currently in the market trying to buy a house, you know how strong your offer needs to be to get accepted. We will detail a few tricks our clients are using to set their offer apart from competing offers. 

Advice And Tips For Homebuyers In Shopping For A Home And Mortgage During A Sellers Market

Capital Lending Network, Inc. are experts in mortgage lending and help many families get pre-approved and buy a house every single year. Our team is well-versed with ever-changing mortgage guidelines and is able to offer mortgage products without additional lender overlays. We also specialize in NON-QM mortgage loans. This helps us keep a good pulse on the state of the overall housing market.

Overcoming Obstacles In The Current Housing Market

Many of our borrowers are currently pre-approved and out shopping for a house. This is where they are running into barriers. The current housing market is incredibly competitive. The creditworthiness of American borrowers has never been higher. This is due to a number of different reasons including pandemic relief. Many Americans were able to pause payments such as mortgage and rental payments, increasing their overall savings. The pandemic also allowed many borrowers to catch back up on past due bills. It is estimated that Americans’ credit scores are currently 20 to 30 points higher than average.

The High Demand For Homes And The Low Inventory

Increased savings, as well as higher credit scores, has created a larger number of pre-approved mortgage borrowers. The lack of inventory has created a high demand and low supply across the country. While we have seen the housing market cool off slightly, it is still booming. America has not seen housing inventory this low since the 1970’s when mortgage interest rates ranged from 7% to over 11%!!!! The historically low rates and low inventory have created a sellers’ market. 

How Buyers Are Getting The Winning Bid On A Home

What are borrowers doing to get their offer accepted?

It is no secret that pre-approved borrowers are getting creative to have their offer accepted by the seller. It is becoming more common to have inspections waived, meaning a seller will not need to fix anything on the home when selling the property. Unless a major issue comes up during the appraisal, a borrower is responsible for all damages to the property. Appraisal gap coverage is more common than ever.

Shopping For A Home And Mortgage: Appraisal Gap Explained

What does appraisal gap coverage mean? Let’s give an example. Let’s say you are trying to buy a house for $350,000 in a competitive market. In order to get your offer accepted, you decide to offer $360,000 with a $10,000 appraisal gap coverage. This means you will pay up to $10,000 in cash to cover the difference if the house doesn’t appraise for $360,000. This gives peace of mind to the seller if the appraisal does not come in at a higher value. In some areas of the country, this process is referred to as additional down payment or “AD”. Remember, a lender may only offer you a mortgage based on the purchase price or appraised value, the lower of the two. The good news is, since values are up in most areas of the country, and bidding wars are more common, a lot of appraisals are coming in at the higher values.

Shopping For A Home And Mortgage And Buying The Home At Higher Than The List Price

 Putting in an offer over the original asking price is far too common in today’s current housing market. Just from personal experience, I live in the Denver area and was outbid numerous times offering up to $50,000 over the asking price. The market in the Denver suburbs is sky-high. And although the market has cooled off slightly, many preapproved borrowers are still having a tough time finding a house. Realtors are stuck showing more homes to their clients before they are able to land a contract. The housing market is a staple in the local news. I have seen many news stories interviewing potential buyers, real estate agents, and even appraisers to explain the current trends. 

Shopping For A Home And Mortgage In A Hot Market And Multiple Bids

 We have seen many borrowers type up a cover letter when putting in an offer to purchase a property. Many sellers have an emotional tie to their current house and want to make sure someone is going to take good care of it after they sell. I have had borrowers write a narrative about how they plan to move into the property and start a family. They even spelled out a detailed plan of how they would paint two of the rooms based on the gender of children they have in the future. In this case, they actually won the offer.

Keep in mind, their offer was also the strongest, but the quick cover letter did not hurt their case. When a seller knows that their house will be used to raise a family and not for investment purposes, they are more likely to accept your offer. On the selling side, a current client of ours was able to negotiate to sell the property but continued to live in the home rent-free through the end of the year. This sale is scheduled to close on 11/15/2021 and the seller does not need to move out until 12/31/2021. The market is favoring sellers so dramatically, they can live rent-free for a month and a half. The caveat to this story is now the seller needs to find a home to buy in a short timeframe!

The Fear Of Rising Mortgage Rates

Interest rates are very low but as of late, the Fed plans to stop tapering which will eventually increase interest rates. The coronavirus pandemic has sent ripples through every global market and the mortgage industry is no exception. While the economy is starting to rebound, interest rates are expected to tick upwards. As house prices increase and interest rates rise, your buying power may decrease. Meeting this is a great time to get into the housing market. 

Starting The Mortgage Process With A Lender With No Overlays On Government And Conventional Loans

If you or someone you know is ready to get preapproved for a mortgage, please have them cal us at 800-900-8569. They may also email their scenario to contact@capitallendingnetwork.com. Our team is currently licensed in over 20 states, and we have referral partners in other states. Our team is growing at a rapid rate and we are here to help you and your family.

Our team is available seven days a week to assist you in this highly competitive mortgage housing market. You will need a lender to help set you apart from the competition. We will call the listing agents when submitting an offer to relay the message of a strong pre-approved borrower. Any tips and tricks will help get you into the house of your dreams. The team at CLN has a national reputation of not having lender overlays on government and conventional loans. We just go off the AUS Findings with zero lender overlays.

Vetting The Mortgage Company You Are About To Hire

We encourage you to check out our strong reviews as well as our customer testimonials. Since we do not have lender overlays, we are able to help more families compared to most lenders. The COVID-19 coronavirus outbreak increased lender overlays across the industry. The good news is we have not needed to add any lender overlays to our FHA, conventional, and VA mortgage loan products. We would love the opportunity to help you and your family so please reach out today. Even if you were turned down by a mortgage lender, we strongly encourage you to reach out to our team as soon as possible.


Michael Gracz NMLS 1160212 is a veteran mortgage loan officer at Nexa Mortgage LLC. Mike can help borrowers with less than perfect credit and higher debt-to-income ratios. Due to Nexa Mortgage being a no overlay lender on government and FHA Loans, Mike can structure any less than perfect borrowers' files and help them qualify for a home loan in a matter of a short time. It is not if you can qualify for a mortgage with Mike but when. Mike Gracz can be reached at 630-659-7644 or email at mgracz@gustancho.com

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