In a seller’s market, those have their homes listed for sale have the advantage over buyers who are shopping for a new place to live. This type of market is categorized by low inventory levels and high demand among qualified buyers. Generally, home prices go up during a seller’s market, and buyers often have to submit attractive offers that will motivate sellers to accept their offer versus another one.
Buyers who are facing a seller’s market will need these tips in order to survive the process:
Get a Preapproval Before Looking at Homes
Competition is steep during a seller’s market, and most sellers are not going to even consider an offer that does not include a preapproval letter. Before you begin looking at homes, it’s important that you work with your lender to determine your budget and your price point. Have your lender draft a preapproval letter that you can submit along with your offer, as this proves to the seller that you are in good financial standing and you are capable of purchasing the property.
Hire a Real Estate Agent with Experience
Buyers need to be able to showcase their potential in the best possible light when trying to get a seller to accept their offer. Only the most experienced and qualified agents know how to create and submit offers that are attractive to sellers. The right real estate agent will know what to include in the initial offer, and what to compromise on during negotiations. A savvy agent will help you get a signed purchase agreement for the home that you have been dreaming about, despite the fact that it’s a seller’s market.
Be Willing to Compromise
When the seller has the upper hand, you will need to be willing to compromise in order to get your offer accepted. For starters, buyers in a seller’s market need to plan on submitting an offer that is at least asking price, if not higher. Sometimes, a buyer also may want to add extras in their offer — such as additional occupancy at no extra cost. This could be attractive to a seller, because it eliminates some of the stress associated with moving and proves that you are a committed buyer.
Pay with Cash When Possible
In a seller’s market, money talks. The more cash that a buyer has at their disposal, the more likely the seller will be to accept the offer. Obviously, an all-cash offer is ideal, but that is not often possible. However, buyers may want to consider putting more than 20 percent down or offering a higher earnest money deposit in order to motivate sellers to accept their offer.
Keep an Open Mind
With less available homes on the market and more buyers vying for those properties, you will need to keep an open mind when searching for a new house. It’s important to have a list of must-have features, as well as a list of features that would be nice but are not absolutely necessary. Consider the long-term potential of the home, such as work that you could do after you have moved in. Also think about the things that you can’t change, such as location or school district assignment. Prioritize your criteria, and then begin looking for a home.
Searching for a home in the midst of a seller’s market can be challenging, but it’s important to remember that it’s still possible to purchase your dream home. The key is to work with a dedicated and motivated real estate agent who will go above and beyond for you. For more information on the current market conditions in your area, contact a real estate agent today.