For this step in the process—with so much data at your fingertips—it's particularly important to have a Realtor by your side. "The data is accessible, but it's easy to misinterpret it," DeSimone says.
Peruse your options. This is the fun part. Start by scanning the Web for homes that pique your interest. Listings without photographs are easy to eliminate, as they're usually an indication the property isn't exactly visually flattering. Savvy smartphone users can drive around their desired neighborhood and use a mobile app like Trulia's, which pinpoints their location through GPS and pulls up information on nearby houses for sale, open houses or recently sold homes. With low inventory and buyers ready to pounce, get in the habit of checking for new listings every few days.
Price check. Sellers use comparable homes to determine their asking price, but buyers can use them to help determine a property's fair market value. Focus on those that have sold within the last 60 days, says Corbett.
Many people mistakenly review asking prices of nearby homes on the market when determining their offer. "Anyone can ask any price for a home, so don't get bogged down by looking at what's currently on the market," says Ray Boss Jr., a realtor in Gaithersburg, Md. Still, it can be beneficial to look at what houses have been sitting on the market for a while, since Corbett says there's a reason why they're not selling.
Do a full inspection. Even though it's a competitive market, don't feel pressured to skip the inspection. It's a critical step for both ensuring the home is safe and uncovering any areas that will require renovating. If you're making an offer, Realtors advise clients to make it contingent on a satisfactory home inspection.
A general home inspection typically costs anywhere from $300 to $600, although companies may charge more for large homes due to the extra square footage they have to evaluate. However, Corbett cautions that a general inspection doesn't cover everything.
Frequently, roofing, chimneys and sewer lines aren't included, as most general home inspectors aren't experts on those areas. Certain regions also require geological inspections. For example, in California, a large number of buyers pay for an inspection of the soil conditions of the property, how the home was built and the age of the house, since those factor into how risky the home is in terms of damage from an earthquake or other natural disasters. "I'm all for spending a little more money for all the inspections you need," Corbett says. "You can have a 50-foot sewer line all the way out to the middle of the street, and it could have an enormous break in it; you want an inspector who is going to stick a camera down there."
Inspections that reveal needs for improvement can be used as leverage by the buyer at the closing table. Many times, a seller will agree to lower the price of the home or offer a credit to cover some of the closing costs. However, Boss says, "Don't expect you'll get that $10,000 credit you want, but do what you can to convince the seller it's a reasonable request."
Discuss closing costs ahead of time. They vary by market, but closing costs typically range from 1.5 to 4 percent of the purchase price. These costs can add up significantly, to an amount some budgets may not be able to bear. DeSimone recommends asking for an estimated statement of the closing costs well in advance. By law, buyers are to entitled see them, which gives them the opportunity to question ones that seem inappropriate or unreasonable.