The 10 Things That Smart Buyers Do In A Seller’s Market
There are 2 different types of real estate markets and they are a buyer’s and a seller’s market. If you are buying a house, you need to know what market you are dealing with because you need to take different actions. Seller’s markets are not ideal for buyers which is why you should know the top 10 things that smart buyers do in these markets to get the home that they want.
Do Not Stop At Getting Pre-Qualified
When you buy a house, you should look at getting pre-qualified for your mortgage. However, in a seller’s market, this might not be enough to make you a more attractive buyer when compared to someone else. To give yourself better chances of getting the house you want, you should look at getting pre-approved.
Being pre-qualified means the mortgage lender has checked your credit and determined that it is good enough for approval when the time comes. However, when you are pre-approved it means that the mortgage lender has looked at all of your paperwork to verify that you will be able to get a loan to cover the purchase of the property. When you are pre-approved, you should include a pre-approval letter with the offer you make to show the seller that you have the means to follow through with the purchase.
When you are working in a seller’s market, your offer to purchase is more important than ever. This is why you need to hire the right real estate agent. A smart and professional agent will be able to ask the right questions and ensure that you have the strongest negotiating position possible. The agent will also be able to determine if you should be making a higher offer based on the potential of multiple offers and the interest in the house.
A good real estate agent will also be able to negotiate correctly with the sellers. While it is a seller’s market, you should never have to complete everything on their terms. Having the right agent can ensure that the purchase offer and sale works for everyone involved, not just the seller.
Do Your Homework On The Area
Most people have an idea of the area that they want to move into, but you need to do some research before you commit. Once you have a real estate agent, you can ask them to help you find out about previous sales in the neighborhood you want to move to. This will give you an idea of whether or not you can afford to buy in the area and what the houses are likely to be listed at. The more you know at the start of your house hunting, the more prepared you will be.
You should also look at spending some time in the neighborhood before you look at houses. You need to see what the area is like in the morning, afternoon and evening. This will give you an idea about the traffic, noise and the neighbors. If the area does not suit your lifestyle, you should not continue looking to buy there.
Know What You Need And Want
When you are in a seller’s market, knowing what you need and want is vital to getting a home that you are happy with at a good price. Perfect homes are snapped up in these markets which makes your needs more important than your wants. When you consider what you need, you should look at aspects such as the size of the house, the amenities, the location and the condition. Aspects that fall into the wants category will include having a garage, the size of the garden and whether the windows face a certain direction.
When you have a list of needs, you should consider which ones you are more flexible on. Do you really need to have a house with 2 studies or in a certain area? If you can be flexible with some of the needs on your list, you will have a better chance of finding the perfect home in a seller’s market.
Have A Firm Budget
One of the most important things that you need to do as a buyer in a seller’s market is to have a firm budget that you do not waver on. It is vital that you know how much you are able to spend and that you do not look at properties above this amount. The seller’s market means that the seller is highly unlikely to settle for a lower price as there is likely to be someone else who is willing to pay their asking price.
Having a firm budget also ensures that you do not get carried away in a bidding war. Demand for property is high in a seller’s market and there will be other buyers with more money than you. If you are outbid on a house, even if it is perfect, you should never offer more than your budget.
Your purchase offer will be more attractive to a seller if you are more flexible and able to work to their needs. When you have a good agent, they will be able to find out what the seller needs and guide you in making the offer. One of the most important points that you should be flexible on is closing when the seller prefers.
Being flexible can set you apart from the other buyers. If the seller is looking to move out quickly and you can accommodate this, your offer will be taken more seriously than someone who is unable to. Of course, you will need to ensure that you are not putting yourself in financial problems by being too flexible.
Look For Potential
Most people want to buy the perfect house that they can move into and not have to do anything to. The problem in a seller’s market is that these houses will be snapped up quickly. The best solution is to look for potential instead of perfection. When you look at a house that has small problems or cosmetic issues only, you might be able to get the home that you want at a very good price.
Of course, when you look for potential, you need to consider how much work you are going to do. If you are happy with having to install a new kitchen then you can look at houses that have not been updated in a while. However, this will not work if you only want to repaint the house.
Always Listen To Your Instincts
If you see a house that you love, you should make an offer. Many home buyers are nervous about doing this as they believe that their earnest money will be lost if they learn about something bad with the house after the offer. This is not actually the case as you will be able to get your earnest money back as long as the contract is canceled before the due diligence date.
Making an offer does not mean that you cannot keep looking at other houses. It is possible to withdraw your offer at any time if you find something that is better. However, you do need to listen to your instincts and only put in an offer for a house that you feel good about. Putting in an offer on a house that you know logically will suit you, but that you do not have a good feeling about will generally end badly.
Buying in a seller’s market can be tough and you need to be patient. If you lose the house that you are bidding on, you should not settle for second best. Take a look at what is on the market again and consider the houses that meet your needs. Your perfect home is out there, but you need to be patient and take the time to find it.
While it is important that you follow your instincts with offers, you should also not rush into anything. This is particularly important if you are entering a bidding war. Being patient will ensure that you do not bid over your budget and that you carefully consider if the property is worth what you are offering to pay for it.
Tell Your Story
Seller’s markets are competitive, but many people do not realize that a bit of personality can go a long way. If you want to stand out from other buyers, you should write a letter to the seller. The letter should be sent with your offer and it should tell the seller what you love about their home. You should also state that you can easily see the care they have put into it and why you can see yourself enjoying the house for years to come. Your letter should be honest, optimistic and kind.
A seller’s market can be a buyer’s worst nightmare as competition is high and your perfect home can be snapped up before you blink. Fortunately, there are a number of steps that you can take to make your buying experience a better one. When you follow these steps, you will increase your chances of finding and securing the best home for your budget in a seller’s market.