When the real estate market is hot and there are more buyers than sellers, this is called a seller's market. It's hard to buy a home in a seller's market. When sellers have all the power, negotiating becomes next to impossible and buyers must act quickly to get what they want. If you're a buyer in a seller's market, knowing what to do and how to successfully negotiate a home purchase is important. These tips can help you buy a home even when the competition is fierce.
Get Your Finances in Order First
Don't assume that you'll have time to get paperwork in order after finding the house you want. Finding financing can take time, and if you don't have financing when you see the house of your dreams, it might be sold by the time you're ready to make an offer.
It's also a good idea to create a budget before looking at homes. Knowing your limits can prevent you from wasting your time. By focusing your attention on homes that you can afford, you'll be able to find a home that you can make an offer to buy.
Everything happens fast in a seller's market. People run out to see houses as soon as they become available. Under these conditions, homes are bought almost as soon as they hit the market. To keep up with the competition, you too will have to act fast. Call your agent the day you see listings for a property you like. Keep a flexible schedule so you can go out to see homes on a regular basis. When you do find a Terwillegar Towne home or one elsewhere, that you're interested in buying, make your decision quickly.
Know What You Want
While it's important to make a quick offer in a seller's market, hasty decisions can lead to big mistakes. Knowing exactly what you want can ensure the home you choose to buy is a home that will make you happy. Before starting your search, make a list of must-haves. Only consider homes that meet your qualifications. This way you'll know when you've seen a home that's right for you.
Sellers are disinclined to negotiate when offers are stacking up. Put your best foot forward when you make an offer to help your offer stand out from the competition. If you don't have enough money to compete with other buyers, look at homes in a slightly lower price range. This will give you some wiggle room, in case you find yourself in a bidding war with another buyer.
You can also entice sellers to accept your offer by sweetening your deal in other ways. For example, a flexible move-in date might be attractive for a seller who needs to buy another house before moving. If you're wondering what else you can do to make your offer more desirable, ask your real estate professional to contact the seller's agent. The seller's agent will be able to tell your agent what the sellers want.
Minimize Excess Contingencies With Your Home Offer
Contingencies are clauses in the home buying contract that allow the buyer to back out of the purchase offer, if certain conditions are not met. Contingencies are used commonly during the home buying process to protect the buyer.
Sellers often expect some contingencies in the home purchase agreement. The most common contingencies include:
- The financing contingency allows buyers to cancel the home purchase agreement if the loan does not fund.
- The appraisal contingency gives buyers the right to cancel the home purchase agreement if the home does not appraise for an amount at or above the offer.
- The inspection contingency enables the buyer to renegotiate or cancel the contract if the inspection turns up major problems with the home.
While these contingencies are expected, other contingencies could be a red flag to home sellers. Home buyers who want to ensure that their offer is competitive should avoid using any contingencies that are not commonly used by other buyers in their market.
Work With a Real Estate Professional
Working with a real estate professional is essential when buying a home in a seller's market. Your real estate professional can help you purchase a home you'll love even when the competition is fierce. If you're thinking of buying a home in a seller's market, contact a reputable real estate agent today.
By Justin Havre