In a robust real estate market, the seller usually holds the winning hand because there just aren’t enough homes on the market. In a seller’s market, sellers usually get multiple offers and can often get bids that are over the listed price. House hunting is challenging enough at any time, but shopping in a seller’s market is a whole additional difficulty level.
The supply of homes is low across the country and demand is high. So with lots of competition out there how do you survive the house-hunting and hopefully land that home you’re after? While there are no guaranteed ways to succeed, here are a few tips to help increase your chances of getting a home you truly want at a reasonable price.
There’s a myth among some novice home-buyers that it’s only the sellers who need a real estate professional, which couldn’t be further from the truth. Having someone who knows the local market well, is experienced with evaluating homes, knows how to successfully negotiate, and who will be your advocate through the entire process is absolutely critical.
If the majority of houses have been sitting on the market for more than six months, it’s not a seller’s market. If it’s only those ultra-luxurious properties which have been on the market for over a few months, that indicates that houses are getting snatched up quickly.
Getting prequalified lets you know how much home you can afford and it also shows sellers that you’re a serious buyer who is much more likely to be able to close escrow.
Although your real estate agent will provide lots of help in your home search, it’s important to do a little homework on your own up front. It will help the home-buying process if you know which areas you’d like to live in, what you can afford, and the type and size of the home you would prefer.
To succeed in a seller’s market, you have to make house hunting a priority and always be available. Treat house hunting as you would job hunting.
Everyone wants that big, gorgeous home in the best neighborhood, but you may have to compromise a bit, especially when the market is competitive. This doesn’t mean settling for a home you dislike; it just means going after homes with the features that you really need, rather than what you simply want.
Typically, when home buyers make an offer, they do so only with contingencies. For example, they would buy a home if the inspection goes well or if they can secure financing. However, in a seller’s market, it may behoove you to drop one or two of these caveats to stand out to sellers, who generally would prefer very few hurdles on the way to closing.
Work with your real estate professional to put together a strong offer for the home you’re after. You may also want to work with the seller on a closing date and contingencies.
In your typical home-selling scenario, buyers make an offer below the seller’s asking price, then negotiate upward from there. But in a seller’s market, there is often little or no room for price negotiations. It’s almost always a waste of time low-balling a seller.
If two offers are close, it may help your chances to try to personally connect with the seller or by write a letter detailing how much you love their home and how much you dream about living there.
In a seller’s market, it’s not unusual to feel out-priced in your favorite neighborhood, but that may merely mean you need to start scouting farther afield, such as visiting an up-and-coming neighborhood nearby.