Buying In A Sellers Market - 4 Tips

Competition in real estate can be exhausting. You might really love the school district, convenient commute, or local attractions that made an area your #1 choice; however, as the bidding wars rage on, you might wonder, “Should I buy in a seller’s market?”

If the answer to that question is “yes” for you, you’ll want to be prepared. Not to worry, we know what it takes to successfully navigate buying in a seller’s market and we’re sharing the info with you right here. Keep reading to see how you can get a leg up when shopping in a seller’s market.

1. Schedule a Buyer Consultation with a Real Estate Professional

Once you have picked your real estate agent (click here to find out how to pick the one that’s right for you), schedule a time to meet with them. This is when you can ask questions about the home buying process and get an understanding of what to expect.

Your agent will be able to help you determine your needs and wants, which will be crucial as you start hunting for your home.

2. Get Pre-Approved

This part can be very make or break for first-time homebuyers. If you’ve decided you want to throw your hat in the ring and make an offer, always assume that many others have as well. Anticipating a multiple offer situation can help you come out ahead. It’s a good idea to look at homes listed $5,000 - $15,000 UNDER your Pre-Approval amount so that you have room to be competitive with your offer price.

In order for you to be “offer ready” when you find the property you want, it’s crucial to have any supplemental paperwork, like your mortgage pre-approval and proof of funds for the down payment, ready to go ahead of time.

If you don’t already have a lender in mind, your agent can help with recommendations of trusted lenders.

3. Select homes to view

Once you are pre-approved, you’ll need to get search criteria set up to know when a new listing hits the market immediately. Click here if you’re ready to get rolling!

Knowing your needs and wants and being prepared to make a quick decision will be necessary, as homes are selling quickly.  Time is of the essence, so once you’ve found a home that meets most or all of your wants and needs, the decision to put an offer in needs to be made quickly. For hot markets like we are currently experiencing, you might only have a day or two to get your offer submitted after viewing the home. Double check with your agent regarding the offer deadline so that you can be sure yours is submitted on time.

4. Prepare to make a simple and strong offer

Each offer and each situation is different, which is why your real estate agent will guide you through the different contingencies in an offer to purchase to help you put your best foot forward and make a strong offer.

Now, most offers include contingencies — things like completing inspections and receiving a mortgage loan commitment — that need to happen for the transaction to move forward. When looking at offers, sellers tend to see contingencies as potential opportunities for the deal to fall apart. As a result, they’re more likely to choose an offer that’s relatively “clean” or reduces their risk of potential hang-ups.

In a competitive market, you might see other buyers removing or reducing their contingency periods to make their offer more competitive. However, it’s also crucial that you feel comfortable moving forward. For example, if you choose to waive an inspection contingency, you’re agreeing to buy the home regardless of what problems may exist.

As you put your offer together, consider the maximum amount you’re willing to pay, what compromises you’re willing to make and how flexible you can be on your closing schedule.

Besides keeping your contingencies in check, there is another component of the offer that will help set you apart from the crowd and it’s fairly obvious — the offer price. Put simply, money talks. When you’re vying for a home in a popular neighborhood, you need to put your best foot forward.

As for how much you should offer, consider the asking price first. If it’s within your budget you may want to at least offer that amount if not a little more. Consider the amount listed on your pre-approval as your maximum, and work within those limits.

You can use a mortgage calculator to get an idea of what your monthly payment will look like at various sale prices, but also be sure to confirm this with your lender as well.

It can feel overwhelming shopping for a home amongst fierce competition, but don’t be discouraged. With the right amount of preparation, trusting your agent to guide you through -- after all, they do this every day all day --  you’ll be ready to make the necessary moves to secure the home of your dreams!