Buying Into a Seller’s Market: Strategies for Navigating a Less Than Ideal Situation
When housing markets are depressed, first-time homeowners have plenty of negotiating power, and sellers may need to make all kinds of concessions to get their homes to sell. Buying into that kind of environment is relatively easy, but what happens when the roles are reversed?
If you are looking for a home in a seller’s market, you are the one who may be forced to compromise. In that difficult environment, you need a strategy for success, or better yet five of them. Here are five smart strategies for navigating a less-than-ideal situation.
1. Educate Yourself
When the housing market is on fire, knowing what you are doing becomes even more important. Educating yourself about homeownership, from the real expenses you will be facing to what to look for and what to avoid, is a vital part of navigating a seller’s market, so do yourself a favor and speak with a financial advisor who can assist you in creating a financial plan, as well as making sure you do not get in over your head.
Seeking financial advice, especially for a first-time homeowner is one of the best gifts you can give your future self. No matter how much you think you know, you can always learn more, and the plan you help create for your future investment will be repaid many times over.
2. Keep Your Budget Realistic
It’s easy to stretch your budget to the breaking point in the face of a seller’s market, but that could be a long-term solution to what is actually a short-term seller’s market. If you buy more home than you can afford, you will live to regret it, and in a seller’s market, there is always the risk of buying in at the top and seeing your hard-earned equity disappear.
If you need to revamp your budget to make the numbers work, stick to changes you can live with for the long term. Making a lot of small changes could be more effective than making a huge sacrifice that you will later regret.
3. Do Not Skip the Inspection
With bidding wars breaking out on front lawns and houses hard to come by, many buyers are skipping the inspection, but that can be a dangerous tactic. You never know what might be lurking behind that lovely façade, and unless you are a structural engineer, you will want a third-party expert to check things out.
If you need to do so, you can always schedule an expedited home inspection, but you should never skip that inspection altogether. At the very least, a good inspection will give you peace of mind; at the worst, a bad one could stop you from making a very costly mistake.
4. Choose Your Agent Wisely
Having the right real estate agent is always important, but it’s absolutely critical when navigating a seller’s market. Seeking an experienced real estate agent is a must. Our agents at Summer House Realty know the local market, and real estate trends, and can help guide you in making the best decision for your budget and your home investment.
5. Make Your Best Offer First
Buying a home in a seller’s market is not ideal, and it is important to recognize that you will have little to no negotiating power. Now is not the time for lowball offers, and even full-price offers may end up being rejected if a costly bidding war breaks out.
When you find the home you want, you will want to make your best offer first. That means being absolutely sure of your budget and how much you can really afford to spend, and this is the time when all your hard work and preparation will really pay off.
In a perfect world, the real estate market would be high when you are selling and low when you are buying, but that kind of perfection simply does not exist in the world of real estate. In the real world, you will not be able to control the larger economic picture, and that means you might end up buying into a seller’s market.
In this difficult environment, the best you can do is focus on the factors you can control, from how you design your household budget to the questions you ask prospective agents. The five strategies outlined above can help you navigate these tricky waters, so you can still find the home of your dreams.
Summer House Realty
If you are in the market to buy a home contact Summer House Realty today. We are one of the largest brokerages in Amelia Island, FL, and August, Ga. If you would like to schedule a free consultation with one of our seasoned agents, please call us today at 904.557.3020 (Amelia Island) or 706.955.6436 (Augusta).