How To Buy In A Seller’s Market
Wondering how you can buy in a seller’s market? 2021 is defying the old model of house hunting, which depended upon seasonality. The Covid pandemic has ushered in new rules around home buying, and on top of the pandemic changes, most of the country finds itself in an uber-competitive seller’s market.
If you or someone you know feels like buying a house is challenging, if not impossible, we’ve got eight buying strategies to help you feel more confident in the current market.
8 Strategies For How To Buy In A Seller’s Market
Get a Mortgage Pre-Approval
There are various methods buyers can use to win a home in today’s unbalanced market. However, the one resounding rule all industry experts agree upon is that obtaining a mortgage pre-approval before you begin house hunting is in your best interests.
A pre-approval tells sellers that a lender has verified your finances, debt-to-income ratio, and creditworthiness and that you’re ready to buy. No seller, and no good Reatlor® advising a seller, will choose an offer from a prospective buyer who has not been pre-approved. A pre-approval letter is very different from a pre-qualification letter; make sure you know the difference.
Don’t Be Shocked If You Need To Pay More Than the Asking Price
It’s a seller’s market, and that needs to be understood. A seller’s market means that cutting deals or asking for discounts is not a good idea. Even if a home needs significant repairs, you may find yourself deciding if you want the house because if you push for repairs, you may not get it. This is due to the drastic imbalance between supply and demand.
The extremely low inventory gives sellers the upper hand, making it harder to lock in a deal or get a discount on a home. Interest rates are starting to inch up, but inventory remains low. We’ll continue to see multiple offers and homes selling well over the asking price for a while longer.
Look for Homes Below Your Budget So You Can Bid Up
Currently, multiple record numbers of bidders are all going in on the same home. This is the reality in the housing market across the U.S. For buyers, this means it’s probably not in your best interest to look for homes at the top of your budget. If you’re looking for homes where you have no wiggle room left, you can guarantee someone will outbid you.
If you’re serious about home buying, it will benefit you to search for homes a bit below your spending limit. This way, you have room to bid over someone else.
Allow Extra Time If Borrowing Money
Frequently first-time home buyers borrow money to make a down payment on a house. However, make sure to factor this into your timeline. Talk to your lender if the funds you expect to receive are from outside sources; they can help guide you through the process. For example, if someone gives you money to help you with your down payment, there will be multiple steps to verify and approve those funds. You don’t want until the last minute to get all of your ducks in a row. If you’re not prepared, the sellers will go with another offer.
Hire The Best Realtor® Agent You Can Find
An excellent real estate agent is a buyer’s secret weapon. They’re not only expert negotiators and have a solid understanding of the area and neighborhoods you’re interested in, and they often have terrific connections from which you can benefit.
Don’t Get Stuck On One House House—But Don’t Give Up Either
Sometimes it’s hard when something feels just right, but try not to get fixated on just one house. This can lead to major disappointment, or worse, bad financial decisions made out of desperation in the current market. However, that doesn’t necessarily mean you should turn and run the other way as soon as someone outbids you or comes in with a tempting cash offer.
As any real estate agent with experience can attest, deals fall through every day. So be prepared to be a second choice, but also be ready to move on.
It’s Not Just About Price
Look past the cost of the home when you’re trying to win a house. Your Realtor® should be experienced enough to find out what, beyond the listing price, is essential to the seller that may give you an advantage.
You may have the opportunity to win on other contingencies or by playing off of conveniences that would entice the seller. For example, you may offer an earlier closing or a lease back to allow them a more manageable move into their next home.
Expand Your Search
The most sought-after neighborhoods have the highest price tags. If your heart is set on owning a home, but a specific area is out of your budget, you might have to choose between the two. You may find yourself opting for homeownership over a coveted ZIP code, and if that happens, you need to be open to other areas.
Start by identifying what it is you like most about your dream neighborhood. Whatever features you value, have your Realtor® help you find them in areas you may not have explored before.
Going the extra mile can often lead to beautiful places that people overlook because their names aren’t on everyone’s lips.
Let Living Houston Help You Find A Home
Buying a home in the current market is already stressful enough. Dealing with an incompetent Realtor® will only add to the stress and possibly keep you from getting into a home you love. If an experience with a Realtor® feels easy and pain-free, it’s because that Realtor® has done their job well, not because their job is easy. If you’re interested in having an excellent home buying experience, contact Living Houston today for a consultation.