As a homebuyer, you want the best house on the market for the best price possible. But achieving this in a seller’s market is quite tricky due to the competition for the properties on sale. To have the edge over other buyers in this market, you need to adopt smart buying strategies.
Your strategies should start with having an expert agent like Bost Redevelopment, but it shouldn’t end there. There are many other actions you can take to put yourself ahead of your competitors. What are these actions?
Follow us as we provide savvy real estate tips for buying in a seller’s market. But before that:
Seller’s market vs. buyer’s market
- What is a seller’s market?
The housing market is called a seller’s market when there are more home buyers than houses on sale. The home sellers have the upper hand in this market as buyers will do all they can to get the homes up for sale.
- What is a buyer’s market?
A buyer’s market occurs when there are more homes up for sale than buyers. In this market, homebuyers have the advantage because there is little competition for the listed houses.
So, how can you get a good deal in a seller’s market?
Tips for buying a house in a seller’s market
1. Be prepared
Get your finances in order before you even start shopping for a house. Do your math and consult your lender(s) to know the price range of the place you can afford. When searching for a property, target the ones within your budget. Be prepared to offer above the asking price to compete with other buyers in a bidding war.
In some markets, such as certain areas in Utah, you may need to offer 20% or more above the asking price to win a bidding war.
Remember we told you that the competition is fierce in a seller’s market? Therefore, have your down payment and your mortgage pre-approval letter ready. Sellers lean toward serious homebuyers. Thus, show your seller that you are serious by providing all the required paperwork when tabling your offer.
2. Act fast
Time is not a luxury you can afford to lose when dealing in a seller’s market. To put it simply, “YOU SNOOZE, YOU LOSE.” Good homes don’t stay on the seller’s market for long. In a hot market, an attractive property can receive ten offers or more on the same day it is listed.
Therefore, if you are interested in any home, contact your agent to help you get information about it. If the house is up for sale, act quickly, and bid fast to get ahead of other buyers.
3. Make a strong offer
Remember that you are not dealing with a home seller short of options, so don’t start with measly offers. Other buyers will make high offers; hence, any meager offer is DOA (dead on arrival). To make an offer strong, consider:
- Providing a large earnest money deposit.
- Including fewer contingencies.
- Making a portion (or all) of the earnest money deposit non-refundable.
- Shorten the timeline to close more quickly.
In a seller’s market, getting the seller’s attention can be difficult. A strong offer will serve as a serious declaration of your interest and catch the seller’s attention.
You want the home seller to find your offer even more attractive? Add additional incentives.
Incentives strengthen your offer and make it more appealing to the home seller. They may put you miles ahead of other buyers in the seller’s scale of preferences. Some of the incentives you may offer your home seller are:
- Offer above the asking price.
- Pay for the seller’s moving costs.
- Pay closing costs.
Doing any of these will show the buyer that you are not only serious about the home, but you want it more than the rest.
But you should not just stop at that. You should…
4. Keep your offer simple
Don’t make an overly complicated offer to the home seller. Make your offer as simple as you can and only include the necessary contingencies, if possible.
For example, contingencies, like an extension of the closing date or seeking discounts for certain home repairs, may reduce your chances of getting the house. Other buyers may be willing to close quickly or overlook the repairs. So, why should the home seller choose you?
But you should not overlook essential contingencies like the home inspection. Doing so may put you at significant risk.
If you’re willing to waive the due diligence period to make your offer stronger, note that you may discover major problems with the property and be forced to forfeit your earnest money deposit or face litigation if you are unwilling to close.
If you discover these issues after closing, you need to accept that you will be stuck without remedy unless you can convince a judge or jury that you were defrauded, which can require spending tens of thousands of dollars on expert witnesses and legal fees.
5. Prepare for a bidding war
Many home sellers in the seller’s market usually encourage interested homebuyers to bid on their houses. Therefore, you should be ready to enter a bidding contest with other buyers for your desired home.
One essential tip to note about entering a bidding contest for a home is to stick to your budget. Buying a house way above your budget will result in trouble in the long run. If the bidding price goes beyond your budget, drop out, re-strategize, and look for another house on the market.
6. Stand out by getting personal
Beyond making strong offers and limiting your contingencies, you should be unique in approaching the home sale. You can write or create a video for the home seller to tell them why you want their home. Many home sellers’ attachment to their homes is more precious than money. Hence, they are on the lookout for a homebuyer who will care for the house as they do.
You can explain how the home is going to become an important part of your life. If you intend to start a family in the house, be sure to mention it. Whatever you do, just don’t lie. Be honest, personal, and straightforward.
Savvy agents may block these personalized communications from reaching the seller to prevent the seller from risking discrimination, but as a buyer, adding a personal touch to your offer may increase your chances of getting the home.
Let Bost Redevelopment help you buy your dream house!
Having an agent like Bost Redevelopment in your corner automatically increases your chances of getting the house of your dreams.
Our expert team of real estate agents will provide all the support you need throughout the house buying process. We will use our network and connection to help you find the house of your dream. Lastly, we will negotiate with the seller to make sure you get a favorable deal.
Want to talk more about your options? Please leave us a message below with your contact information and let us know how we can help you.