You've done everything correctly so far: improve your credit score, get a lender pre-approval letter, and work out a comfortable budget for buying a home and making payments. And yet, the housing market in your area has gone to the birds, with multiple offers pouring in for each house, and sometimes it seems the house is sold before you even know the house is available. If you're like most buyers, you want to get the best deal for your money, so you might have been looking only at houses in a certain price range. Would it help to look at more expensive homes in hopes of finding less competition? It can to an extent, but you have to be careful when you do so.
Don't Confuse the Most Expensive on the Block With a More Expensive Range
First, know what you're looking at. If you want to look at homes in a more expensive range, there are plenty. But be aware of houses that are the most expensive on the block, rather than being in a neighborhood where the average house price is more expensive. The most expensive houses in a neighborhood where most homes cost less could be worth the price, but you want to be sure the price the sellers are asking for reflects the actual appraisal and condition of the home. You don't want to buy the most expensive and find the price was a result of the sellers just inflating their desired number of dollars. This is a really good reason to look for homes with a real estate agent since the agent can help you weed out sellers in these situations.
Ask Your Lender if Increasing Your Cash Down Payment Can Increase Their Pre-approval
If your down payment and your income aren't going to change, your lender will likely hold firm in their assessment of what you'll be able to pay. But if you can increase your down payment, or if you know your income will go up soon due to a raise, you might be able to have your lender look at what you're pre-approved for again. If you can increase the mortgage you're able to get, those more expensive homes will be within reach — and that pre-approval letter could help you stand out among the crowd.
Remember the Property Taxes
If you do decide to look at more expensive homes, remember that your property taxes will go up, too. If you purchase a newer home with higher quality appliances, you likely will spend less on upkeep and repairs, so the costs may even out overall in the end.
Talk to a real estate agent about the price ranges you should be looking at. If you can afford to look at ranges where the average home costs more, you could find more supply and less competition.
Consult a real estate agent in your area about local houses for sale for more information.
Once you sign the sale contract with your listing agent, there's a good chance that things will start moving quickly. Your agent will want you to stage your home for the listing photos, open houses, and showings. If you've never experienced the staging process, you may not know exactly what to do or where to start. The information on this site will help you to not only understand what's expected of staging but also offer tips for you to maximize your efforts without investing a lot of time. I hope the information here makes your home sale process a little bit less confusing and a little easier to manage.