It’s happening all around the country. You’re hearing the phrase “seller’s market” mentioned in conjunction with many of the real estate markets in the U.S. today.
Indeed, it’s a good time for sellers to capitalize on the fact that there are lots of folks hoping to buy a home but not enough homes to fulfill all those needs. That leaves sellers with a smile on their face and buyers wondering whether or not they’re going to be able to buy an affordable home in this tight market.
As a buyer, you’ll especially feel the crunch if you’re looking for a home in a first-time buyer’s typical price range for your area AND if you’re looking for a home that doesn’t require that you go in and do a lot of repairs or updating. If you are a bit more flexible on the condition, you might have less of a problem.
However, you and your realtor can rise to the top as a buyer in a seller’s market if you prepare for the experience, do your homework, and are persistent and diligent during your search and during the offer process.
Below are a few tips to help you make your way through what could otherwise be a very treacherous experience.
- Get pre-approved – In a seller’s market, you must be ready to pounce on any house you love. Others will be out there bidding against you! If you have no idea where you stand as far as a mortgage or other financing is concerned, the seller will likely not even consider any offers you make. You must show a pre-approval letter or proof of funds with your offer. As a matter of fact, in a tight market, some realtors won’t even take you out to look at homes if you’re not pre-approved. For them, it’s a waste of time.
- Be aggressive in your search – In a seller’s market, houses come on the market, and – before long – the good ones are gone. So, you may have to adjust your schedule a little and be willing to rush out to see a house with your realtor as soon as he notifies you of the home’s availability. Your agent knows the reality of the situation and will likely make time for you when something he/she thinks is ideal for your needs comes on the market.
- Make an offer quickly – In a seller’s market, the buyer has to be willing to move quickly. Likely, there will not be time for return visits to the property, so be sure to peruse everything carefully the first time through. Then, if you think it’s right for you, make an offer immediately and be sure your realtor presents it just as quickly. When the market is super tight, a few hours spent “thinking about it” can mean the difference between getting the house and not getting it.
- Don’t overlook any possibilities – In this age of technology, some buyers will literally “judge a book by its cover” (dismiss a house because they don’t like a picture of it) or judge it solely by the photos they see on a website or app. Don’t do that! Pictures never tell the whole story. By refusing to see a home in your ideal neighborhood in the right price range just because you don’t like the photos, you may truly be overlooking something special. Keep an open mind!
- Don’t play games – When you’re ready to make an offer, make the BEST OFFER POSSIBLE. Know how much you can and are willing to spend and put that number out there on the table at the start. Similarly, don’t play around with things like asking for money for closing costs, etc. Just be honest with yourself and with the seller about what you can afford. If it’s not to be, it’s not to be. But at least you’ve given it your best shot.
- Consider including a personal letter – When the seller is looking at four identical offers, what makes one better than the other? Well, it may just be that note from you that tells them why you want to buy their house and what owning it will mean to you. It might be a note about the fact that you grew up down the street and have fond memories of that particular house or the neighborhood. It could be a letter that simply tells the current owner how much you look forward to your kids growing up in their amazing backyard. (Include a photo!) You never know what will touch the seller’s heart. But do be sincere! Don’t just write what you think they’ll want to hear.
- Be flexible about repairs – If you get the deal and the inspector returns to you with lots of issues, be flexible about what you will consider as acceptable concessions from the seller. If the problems are minuscule, you might handle them yourself. Remember, an inspection should be used to alert you to the significant, expensive problems, like a faulty foundation or a bad roof in need of replacement. Large ticket repairs, if found, can then be reasonably discussed with the seller’s agent. It’s essential to keep in mind, however, that sellers are less likely to be willing to pay for repairs when the market is in their favor.
- Ask your agent about a “back-up” deal – If you didn’t get the house you wanted but aren’t quite ready to give it up, ask your agent to submit a back-up deal. This deal can go into effect if the current deal falls through for some reason. It’s a good option in a seller’s market and will put you front-and-center if something does indeed happen with the original accepted offer.
Experienced realtors know how to handle buying a home in a competitive seller’s market. Rely on your agent to help guide you through the pitfalls, and you’ll be in your dream home before you know it!