a young couple view a property guided by an estate agent. They are entering the hallway of house and chatting about the paperwork that they are holding .

Before you start checking out homes you like, get preapproved for a mortgage. (Getty Images)

It’s a seller’s market these days. Homes are selling on average within three weeks – only taking a day to go off the market in some parts of the U.S. Buyers have little time to locate, bid and win the home of their choosing. Factors such as walkability, proximity to employment centers and desirability of school district are just some of the things driving up home prices.

Meanwhile, the reality of high rents across the country and the prospect of higher mortgage rates is convincing many people to take the homeownership leap now. But by being a little flexible when assessing these attributes, buyers can press through the competition and find and buy a home that they’ll love.

[Read: 12 Things That Trip Up Homebuyers.]

Here are five things you can do to make yourself a strong competitor in a tight homebuying market.

Get preapproved. While it should go without saying in today’s market, many homebuyers still begin visiting homes without a mortgage approval letter from their lender. Know the difference between prequalification and preapproval. A preapproval means that a lender has actually examined your credit and other expenses helped you determine how much mortgage you could afford given their underwriting guidelines.

Submitting an offer to a seller with only a prequalification letter could sink your bid in a hurry, because prequalification only shows how much house you could afford based on your income. A savvy seller’s agent knows that a buyer with strong income may have other debts that make affording a mortgage on their client’s home a financial stretch a lender isn't likely to approve. Submitting an offer with a preapproval shows you’re a serious buyer, ready and financially able to close the deal faster than a buyer without such an approval.

Avoid the contingency contract. Just about every real estate agent will tell you that contingencies in a buyer's offer will quickly move that offer to the bottom of the pile. Contingencies, such as having to sell your home before closing on the other one, will certainly turn off sellers. Remember, there is very little inventory on the market today on a national scale. Every market is different, but a firm, clean offer even in a less competitive market tells the seller you’re serious and more likely to finish the deal on time.

[Read: 8 Things You Can Learn From a First=Time Homebuyer Boot Camp.]

Make a strong net-price offer. Outside the hottest markets where bidding wars are the norm, buyers can realistically submit a price that is below asking. There is always wiggle room in determining a sale price. However, be realistic. Offering more than 10 percent below the asking price is a quick way for the seller to turn down the offer. An experienced real estate agent will help you make a strong, nonemotional offer.

The net price takes into account closing costs and any other monetary details agreed upon in the deal, as well as the sale price itself. To better capture the full picture of your offer, make sure your real estate agent has reviewed the net to the seller price, which takes into account everything the seller will be expected to account for. For example, a home might sell for full price at $300,000, but the sales contract had the seller give $10,000 in closing cost assistance. In this case, the net price is $290,000, not $300,000.

Gather your best down payment. Present an offer with the highest down payment that you could reasonably manage. Average down payments were on the rise in 2017, according to research from ATTOM Data Solutions, which curates a property database, reaching 7.6 percent of the median sale price, up from just over 6 percent in the middle of 2016. According to ATTOM, sellers are more likely to accept an offer from a buyer with a larger down payment for a variety of reasons, including the belief that a buyer with a larger down payment is going to more smoothly qualify for a mortgage.

For many buyers, gathering funds for a down payment is difficult. However, there are programs available across the country that can help a buyer add to the amount she's saved on her own. Remember, these down payment assistance products and programs are not limited to low-income buyers, and many are not just for first-time buyers. The best way to locate the right down payment program is to contact a local housing counseling agency. The Department of Housing and Urban Development website has an easy way to find a housing counselor.

[Read: Will You Be Able to Get a Mortgage in 2018?]

Look for diamonds in the rough. Every in-demand community has them – houses that don’t put their best face forward. Buyers who are looking for their dream home will avoid homes that don’t have all of the latest bells and whistles and upgrades. Don’t be that buyer. Purchasing a home that needs upgrades or investments to bring it up to your standards may be worth investigating if the all-in cost can be managed. Not many people want to live through a home renovation, even a small one, but if you can look toward the finish line, a great home may be right in front of you.

If you are considering the purchase of a home that will need more than a new coat of paint and carpet to make it your dream home, do your homework when it comes to contractors and financing. Most nonprofit housing organizations in communities all across the country can help you identify experienced construction professionals.


8 Potential Headaches to Be Aware of Before Becoming a Homeowner

Be ready for things to go wrong.

The facia board is rotted and the gutters a re falling away from the house.  Look for other images in this series.

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No one loves shelling out money for unexpected expenses, but sometimes that seems like a rite of passage in homeownership. “Most of the time, the unhappy surprises are simply due to people being unaware of the things that can crop up,” says Brad Hunter, chief economist for HomeAdvisor. First-time homebuyers in particular may not know what to expect after closing on a home, and there’s nothing worse than developing buyer’s remorse about one of the largest investments you’ll ever make. Here are eight headaches to prepare for if you’re looking to purchase a house.

A suddenly less-than-desirable location

A suddenly less-than-desirable location

Aerial View of school buildings and a track Central Texas near Austin

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Buying a house across the street from a high school didn’t seem like such a bad idea when you saw how nicely renovated it was. But when you don’t have kids and Friday night football games are keeping you up later than you would like, you realize you should have made a pros-and-cons list regarding the location. Don’t let a charming interior override a location you dislike or a lot that will give you flooding problems. “If you don’t like your lot, don’t buy the house, because you cannot change that,” says Kim Wirtz, a Realtor for Century 21 Affiliated in Lockport, Illinois.

A high monthly mortgage payment

A high monthly mortgage payment

House keys over the hundred dollar banknotes against wooden background

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One of the most crippling headaches to deal with is a monthly mortgage payment you find you can’t quite afford. Lysette Portales, a real estate agent with Century 21 Jim White & Associates in Treasure Island, Florida, says she stresses to clients that they should shop around for a mortgage with multiple lenders and inquire with each about different program options. “A lot of them might be able to do 100 percent [financing],” she says, noting that many homebuyers typically only know about a couple mortgage programs and settle for one without considering what would be most affordable option both now and down the line.

Items that are on their last legs

Items that are on their last legs

A man uses a flashlight to help him see the hot water heater in a dark closet

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Whether it's the roof, water heater or furnace, aging home systems will need replacement. And that may end up being sooner than you’d like, especially if you didn’t pay close attention to the age and condition of the roof, plumbing, electric and heating and cooling systems when your inspector pointed them out. HomeAdvisor’s 2015 New Homeowner Survey found that 75 percent of homeowners face an unexpected emergency within a year of purchase. To expect the unexpected, Hunter points to the survey’s recommendation that homeowners plan to spend 1 percent of the home’s purchase price on unplanned repairs. Maintaining at least that much in your emergency fund will help keep you from dipping into other savings from year to year.

Old systems

Old systems

An old air conditioner unit, in need of updating, sitting in tall weeds

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It’s important to pay attention to a home's aging big-ticket items before you even make an offer. “A lot of homebuyers are distracted by how cute a home can be,” Portales says, adding that she makes it her job to point out the age of the roof, air conditioning unit, water heater and more to buyers. Then when it comes time to calculate an offer, you should factor in the cost of those pieces that will need immediate replacement when determining how much you think the home is worth.

An air conditioner that's not the same

An air conditioner that's not the same

During hot summer night with air conditioning system breakdown trying to find a way to sleep in the refrigerator. Very dark atmosphere. Picture fades to black on left.

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Wirtz says one of the things in a home that seems to always break or have issues within the first year of its purchase is the air conditioner. But it’s not always because it breaks down – she says it simply might not be as effective as the new homeowner wants it to be. “It may not be cooling like they’re used to,” Wirtz says. You can either learn to deal with a little less cooling, bring in an HVAC pro to inspect and fix any problems or research any DIY fixes that might get it cooling better – like air conditioner cleaning spray.

Unseen leaks

Unseen leaks

An old pipe breaks in freezing weather in Baku, Azerbaijan

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Home inspectors aren’t able to see through walls, so the discovery of a pipe leak isn’t uncommon after you’ve moved into the home. But this is one repair you want to make as quickly as possible. “When there’s water that is not stopped, it can create mold – and mold remediation is extremely expensive and extremely difficult,” Hunter says. Mold growth in your home can cause serious health problems, so it’s imperative to address any moisture issues as quickly as possible to avoid it becoming any more dangerous, let alone more expensive.

Surprise renovation expenses

Surprise renovation expenses

Contractor discussing renovations

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Fixer-uppers are all the rage these days, as many homebuyers are willing to take on renovation projects in exchange for a slightly lower price tag. But when budgeting for your renovations, leave plenty of room for the discovery of existing problems once your contractor looks behind the walls. The HomeAdvisor survey found 51 percent of homeowners spent more time on home projects than they expected. “Even if you have a fully vetted, well-reviewed contractor … they still might uncover issues that maybe a previous contractor left incomplete,” Hunter says. He recommends leaving around 10 percent extra space in your budget for surprise problems of any kind.

Problems that pile up

Problems that pile up

Mold grows on a wall next to a damp stained wood door.

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All too often it feels like the problems in a home have a snowballing effect, but you don’t have to go broke tackling them all at once. “Day one, [homeowners] won’t have to tackle all those projects,” Hunter says. “They can use the list of items found by the home inspector as a checklist and prioritize the items on that list and create a budget.” You should immediately address those problems that create a health or safety issue, such as a broken step or leak in your roof that could lead to mold. But replacing an older dishwasher can wait until next year, when you have more room in your home repair budget.

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Tags: real estate, housing market, home prices, new home sales, existing home sales, pending home sales, home improvements


Marietta Rodriguez , vice president, National Homeownership Programs, leads NeighborWorks America's efforts to increase homeownership among low- and middle-income households. Under her leadership, over the last four years the organization and its affiliated network of nonprofits around the United States have helped more than 75,000 families become homeowners. Rodriguez has worked to promote homeownership at NeighborWorks America for more than 15 years.