With Amazon’s second headquarters coming to Crystal City, Alexandria and Arlington have become the two most competitive housing markets in the nation, according to a recent report by Redfin. Home prices in the two northern Virginia suburbs have spiked more than $100,000, on average, since Amazon’s announcement; and, though it will be years before the e-commerce giant completes its HQ2, local residents and investors have been flooding the market in the expectation that home values will rise even higher than they have already.
Here are five tips for first-time buyers in these markets:
*Before visiting homes, work with an experienced local buyer’s agent who can advise you on the particular neighborhoods you are interested in and determine the most effective offer strategy.
*Get preapproved before visiting homes and understand the difference between prequalification versus preapproval. A preapproval means a lender has examined your credit, debts and other expenses to 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 because prequalification only conveys how much house you could afford based solely on income.
*First-time buyers, particularly of condos priced at $500,000 or below, are likely going to be competing with an investor. Discuss with your agent options for making your offer more attractive, such as striking particular contingencies from the contract.
*If multiple offers are on the table, you’ll likely want to include an escalation clause with your offer. Escalation clauses help ensure that you always have the highest bid, up to the maximum amount you set.
*Present an offer with the highest down payment that you can manage. Large down payments are a signal to the seller that your offer submission is serious and that you have the financial wherewithal to secure financing. Speak to a mortgage lender about local down payment assistance products and programs for first-time buyers.