When the inventory of homes for sale in a certain price range is low, there’s generally higher demand – which means several buyers may be competing for the same property and drive up the price. While this isn’t the case in all price ranges, it has been the case for mid-priced properties for some time now. So how can you land your dream home in what’s known as a seller’s market?
We have a few tips!
- Get pre-approved. When you have a letter from your lender that you’ve been pre-approved, you’ll be able to make an immediate offer and assure the seller you’re an legitimate buyer.
- Do your research. Know the type of home you want and neighborhoods you’d consider and stay focused on homes that are within your budget.
- Make an list of needs vs. wants. Could you compromise if you find a home that’s ‘almost’ what you want? Know where you’re willing to be flexible because you may need to make quick decisions.
- Stick to your budget. In a seller’s market, homes sell fast and often above the asking price. Be careful when competitive bidding sends the selling price over your budget. Even if you lose a couple bidding wars, it isn’t a sign that you need to spend beyond what you can afford. Stick to your budget!
- Don’t offer too little. Rely on your buyer agent/realtor ctoan tell you what other homes in the area have sold for so you don’t offer too little on a home that is getting a lot of interest.
- Offer more cash. You might convince a seller to select your offer if you can offer more earnest money (deposit) or a larger down payment.
- Be ready to compromise. Don’t list contingencies in your offer that could be deal breakers. An appliance or that rec room pool table not listed as inclusions. If you want the deal, keep minor additional requests out of your offer.
- Be flexible with timing. If you can stay where you are longer to give a seller building a new home with no move-in date yet, you might be the buyer they want.
- Make an emotional appeal Sometimes, a note sharing ways your family would enjoy the home have won over many home sellers. Can you see your children doing homework by the fireplace? Would you look forward to taking over the fantastic job they’ve done with landscaping? Can you find something that makes them only want you to move in? Ask your buyer’s agent/realtor if they think this is the right time and place to try this tactic.
- Don’t hesitate. Don’t let what you don’t know stop you from making an immediate offer if you absolutely love a property. Your buyer’s agent should include contingency clauses in your offer, such as an acceptable home inspection and acceptable answers to your questions. Your offer can then be canceled by the due diligence deadline so you can get your earnest money back.
Buying a home in a seller’s market isn’t for everyone. If you are looking for a “deal” it may not be the right time to buy. If you’re not up for the challenge – or the stress of competitive bidding – you may want to wait until more homes in your price range become available.