Buying a home in a seller’s market can be like trying to score great seats to the latest Broadway hit show: stressful, challenging, and frustrating. A house comes on the market in the morning and can be gone by noon, snapped up by aggressive bidders who offer way above the seller’s asking price.
If you’re a buyer feeling the heat from chasing too little inventory, you can compete in a fierce seller’s market. And it doesn’t always mean paying more. With the guidance of an established, local real estate brokerage company whose real estate agents are masters of out-of-the-box thinking, you can successfully compete in any market.
6 Strategies for Buying in a Seller’s Market
As homebuyers vie for a limited number of properties, they’re finding they need to be willing to compromise in ways they don’t during a buyer’s market.
- Move quickly and make your best offer first. Remember, there are no counteroffers in a seller’s market! Also, be prepared to tour properties the moment they hit the market and attend showings on the first day whenever possible. When you find a property you love, the faster you make a list price offer, the more likely you will prevent competitive interest.
- Consider forgoing appraisals and inspections. Telling the seller you’re willing to waive the home inspection contingency lets them know you won’t be haggling for repair costs or finding an excuse to get out of the deal. If you’re worried about the consequences of waiving an appraisal or inspection, include language in your offer that reserves your right to inspect the property without holding the seller responsible for repairs.
- Go through full underwriting. In calmer markets, a lender’s preapproval letter is enough to satisfy most sellers. But sellers looking at multiple top-price offers will pick the surest bet. If you need a mortgage, make sure to go through full underwriting before you start looking at properties so that only the lender’s appraisal needs to be done before closing. It’s as close as you can get to being a cash buyer.
- Put up more cash. Show the seller how serious you are by increasing the amount of your earnest money deposit. For instance, if a high earnest money deposit in your area is $15,000, increase it to $25,000.
- Make an aggressive offer. If you’ve found a property that you know is “the one,” making an offer above-asking can help you come out on top in a multiple bid situation. Fortunately, there are times you might only need to offer a few thousand dollars to get the seller interested. A savvy real estate professional can guide you in making an offer that’s aligned to the home’s value while still giving the seller a little more than they’re asking for.
- Be willing to wait. Seller’s markets can be intense and you risk getting caught up in the chase. Hitting the pause button and waiting out the market can be a good plan for many homebuyers, particularly those looking for a vacation home or wanting to downsize. In other words, if you don’t need a property right away, taking a short break from the buyer frenzy might be a good idea. Just keep in mind that prices could move even higher while you wait.
How Not to Overpay in a Seller’s Market
When buying a home, no one wants to feel they overpaid for a property, even in a seller’s market. But if you find a Volusia County property you love and see multiple offers over the asking price, the fear of missing out can really kick in. Listen carefully to the advice of your brokerage firm about when it’s best to walk away. Because when you pay more for a house than it’s worth, you’re essentially starting out with negative equity. If the market doesn’t continue to climb, or if it falls, you could be dealing with an expensive long-term mistake.
There’s a lot to consider when navigating your way through a seller’s market. You want to act quickly on buying a home while also taking the steps necessary to ensure your offer stands out from the competition. Bee Realty Corp’s agents are passionate about helping clients make desirable offers on their perfect properties. Talk to one of our real estate agents today by contacting us online or calling us at 386-279-7522.