Guide for Purchasing a Home in a Seller's Market
- Jun. 25, 2015
- Shantell Russell
- Real Estate Tips
A buyer's market means that the cards are stacked in favor of someone looking to buy a home. However, navigating through the home buying process in a seller's market as a buyer can be tricky.
While a buyer's market means there are a plethora of housing options with not very many people looking to invest in a home, a seller's market translates to a high demand and a low inventory, according to Redfin. The price of homes and whether finding and purchasing a new home will be easy or more difficult depends on the type of market you are looking to buy in.
The Value of a Real Estate Agent
Enlisting the help of a professional can help you immensely especially when trying to purchase real estate in a seller's market. Find a real estate agent who has significant experience and is familiar with the area of neighborhood you want to buy a new home in, according to realtor.com. They have a better idea of the value of various homes in a region they have worked within regularly.
Zillow also emphasized having a professional can help ensure you don't waste valuable time writing multiple offers and potentially face rejection. They can help you provide appealing offers to the seller while still being reasonable for yourself.
Organize Your Finances
Ensure that you know your credit score and that you establish a budget for how much money you can use toward a down payment, according to U.S. News & World Report. By focusing your time and energy on only the homes you know you can afford, you can increase your chances of having your offer accepted by the seller.
Remember to include all other potential expenses, like closing costs, when determining how much you can spend. This can impact how much money you feel comfortable offering the individual selling the home you are interested in purchasing.
By getting pre-approved by a lender you can have a leg up when trying to buy a house in a seller's market. Presenting a pre-approval letter to the seller when you make an offer lets this individual know that the amount you have offered you are approved for and you are a serious contender.
Jump on Good Deals
During a seller's market it is important to always check out homes when they hit the market. Waiting around isn't an option when the option favors sellers. Because of the high demand, many other buyers will likely be aggressive. If you see a new property listed and it appeals to you, try to organize a showing as soon as possible. Try to be flexible with your schedule. Allow extra time to view homes and be willing to drive to open houses and viewings at the last second.
In addition to real estate that is posted on the multiple listing service, try to find homes sold independently by the owner. Short sale and foreclosed homes may also be good places to look for available homes. Use the expertise of your real estate agent—especially when dealing with these types of properties.
Organize a Home Inspection
Despite the housing market tipping in favor of the seller, having a home inspection can give you a bit of power when negotiating a sales price. Hire a professional to inspect the home you are considering and you can use this information to discuss your offer with the seller.
If you have any friends or family members who recently had a home inspection done, ask for recommendations before hiring a company.
According to Zillow, be very alert when touring the home. By noticing whether there are any major or potential issues, you can adjust your offer to meet those conditions.
Let Sellers Notice You
Sellers will likely receive multiple offers. You might wind up in a bidding war trying to get your dream home. When looking for a home in a seller's market it is important to give a fair offer. With the help of your real estate agent you can name a price that is fair while still within your budget.
In addition to making a quality offer to the seller, you may want to humanize yourself. Consider writing a letter to the current owners of the property. Let them know why you want to buy their home and what it means to you. Complimenting their neighborhood, home and staging can help increase your chances of having your offer accepted. This is a great technique that will help you stand out as a buyer.
Being pre-approved for a loan and having your down payment available are additional ways your offer may appeal to a seller. For additional methods, talk to your real estate agent.
Buying a new home is and exciting and interesting journey. Knowing whether you are in a buyers' or sellers' market can help you navigate through the home buying process and increase your chance of finding the perfect home for you and you family.