6 Tips for Buying a Home in a Seller’s Market
In real estate, a seller’s market occurs primarily when there are more people looking to buy a home than there are homes for sale. In markets where the inventory of homes for sale is extremely tight, it can be tough for buyers to find the right home at the right price.
That’s not to say you won’t be able to find your new home, but you should be prepared to use some specific strategies during your home search. Here are six tips for buying a home in a seller’s market.
2. Get your finances in order before shopping
In a seller’s market, you’ll have to be ready to move fast when a home you love hits the market. To move at top speed when it’s time to make an offer, it’s imperative to have your finances in order ahead of time.
You’ll want to get a pre-approval letter from a lender, make sure your down payment funds are ready to go, and clean up your credit report as best you can. If you can afford it, all-cash offers or large earnest money deposits can make purchase offers more attractive to home sellers.
2. Be willing to waive contingencies
In standard purchase contracts, there are usually contingencies for mortgage approvals, home inspections, and appraisals. You probably wouldn’t want to waive these without advice from your real estate agent, but other contingencies such as being able to sell your current home or asking for work to be completed before closing will hurt you. In a seller’s market, there will be less-demanding buyers out there.
3. Hire an experienced, active agent
When inventory is low, it helps to have an agent who has their ear to the ground and knows when homes are newly listed for sale. Experienced, active buyer agents have networks of contacts, including listing agents who sometimes alert them about homes before they are even active listings.
Most people begin their home search on the internet, but when there are few homes on the market, active buyer agents can sometimes get access to listings before they appear on a website.
4. Give the sellers time
Sometimes, sellers will want to delay closing a home sale because they’re not completely ready to move yet. If you’re willing to let them stay for a while – possibly even renting to them if it’s more than a few months – you might be a more attractive buyer candidate than someone who’s going to rush them to move out of the home.
5. Be ready to make concessions
You probably don’t want to purchase a completely run-down home at full market price, but when there aren’t many homes available, it sometimes helps to compromise on the condition of the home.
In normal circumstances, buyers might ask for items in the home to be included in the price or insist that the house be painted before the closing date. They might require a needed repair that’s discovered during a home inspection. In a seller’s market, it helps to be willing to bend on some things during negotiations.
6. Make your best offer first
Especially if a seller is likely to get multiple offers, it’s no time to get cute when trying to negotiate a sales price. No seller ever likes to be low-balled, and when inventory is tight, they might receive offers above asking price. So, if you find a home you truly love and really want, it makes sense to just make your best offer early on. Low-ball offers are always going to lose out in hot markets.
A good real estate agent should provide guidance about making a fair offer that’s in your price range. They also might recommend including an escalation clause, which gives bidders the opportunity to raise their original offer if a higher one comes in.
Buying a home in a seller’s market can be challenging, but acting fast and using these strategies should help you find the right home for you.
Why Summer House Realty is The Right Choice
The housing market in Fernandina Beach has been a seller’s market since before COVID-19 affected our communities. Many northerners are moving south to get away from the uncertainty in their cities. Florida in general has been seeing more than 1,000 people a day move into our state.
Summer House Realty understands the current market environment, and we are well established in the local community to help you navigate a good investment versus one you may regret in the future. If you are looking to purchase your dream home in Amelia Island and would like the guidance and expertise from one of the top real estate agencies in town call us today for a free consultation 904.557.3020. One of our licensed agents is here to help answer any questions you may have.