Tips For Buying Real Estate In A Red Hot Market

If you need to move to a new area of the country to take care of an ill relative but the hot real estate market is making it impossible to buy a house, then you will be pleased to know there are some actions you can take to win the battle and buy your next house. While buying a house in a slower sales market gives you a lot of time to look at homes and think about which one you want to make an offer on, a hot sales market requires that you make quick decisions and have as much prepared ahead of time as possible. 

Here are some tips to help you close on your next home, even if the real estate market is smoking hot:

Tip: Line Up Your Financing to Prepare for a Quick Close

If you need a mortgage loan to purchase your new house, then in a fast market it is vital that you get preapproved for your loan. A preapproval letter shows the buyer that you will not hold up selling their home for weeks before finding out that you can't qualify for a loan to pay for it. In a hot market, buyers will always accept a purchase offer from someone preapproved for financing over someone who is not.

Tip: Consider Writing a Personalized Offer Letter

One of the latest tactics used by many buyers in tight markets to get their offers approved over other people's is to write a personalized offer letter. This is a statement about you and your family and why the buyer should select your offer over others. When you are moving for an ill relative, you can mention this fact in your letter as well as letting the sellers know how much you really love their home and want to make it your own.

Tip: Offer a Larger Good Faith Deposit than Other Buyers

Finally, along with your purchase offer, you need to make a good faith deposit on your new home. The industry standard is a good faith deposit equal to a percentage point or two of the home's sales price. However, in a hot market, the higher you make your good faith deposit, then the more likely a seller will accept your offer over others. If you have the funds available to make a good faith deposit that is two or three times the average, then your offer will go to the top of the pile