Buying a House in a Seller’s Market
In today’s competitive market, the rules for buying a house have changed. Home prices are higher than ever across the country, while inventory remains low, making it a strong seller’s market. Therefore, buyers will need to learn some new tactics to compete with other home buyers.
Read on to see how you can get a leg up on the competition when buying in a seller’s market.
Commit
First off, prepare yourself for the long haul. It may take you several months or even up to a year to buy a house. Low housing inventory and strong buyer demand make for situations where sellers are receiving multiple offers.
So, even if you do make an offer, it may not be the one that gets accepted. Don’t assume you’ll be moving quickly.
Lock Up Your Financing
In a seller’s market, it’s critical that you secure financing before you start looking at homes. If you need a loan in order to buy a home, make sure to get a pre-approval letter before you start going to open houses. If you make an offer without a pre-approval letter, sellers will be less likely to take you seriously and may accept someone else’s offer who is pre-approved or is offering all cash.
Come Strong
When looking to buy in a seller’s market, real estate experts recommend making your best offer first and not to lowball your initial offer if a house is priced to sell. That means if a house is listed at fair market value or slightly above, you should expect to pay full list price.
However, if a house has been listed for over 30 days, it might be because it’s overpriced, in which case you might be able to negotiate.
Separate Your Offer
To get your offer accepted by a seller, you need to stand out from other offers. One way to do this is by making things easier for the seller. You can attach fewer contingencies to your offer to make your offer simpler.
Some contingencies are necessary, such as an appraisal contingency for your lender. Of course, you also want the house to pass a home inspection before you buy. However, if you can let go of some lesser contingencies, do so if possible.
Be Ready to Act Fast
Houses that are available for sale are selling fast, which means that potential buyers need to act fast if they want to buy a home. Real estate pros say that frequently a seller will list on Friday, do open houses on the weekend, and review offers on Monday. This means you may only have a couple of days in which to act on any one listing.
If you’re serious about buying a house and you see one that’s right for you, you need to be ready to make an offer right away.
Ultimately, even though the rules have changed and it might take longer to find a house in a seller’s market, houses are still available for those who act quickly. Since multiple offers on homes are now a reality, it’s harder to get an offer accepted, but not impossible. To make your offer more attractive to sellers make sure to have your financing in place, have fewer contingencies, and give your best price from the start.