Buying a home can already be a challenging experience, but in a seller’s market, it can at times feel hopeless. In addition to the higher prices and the need to make quicker decisions, you’re likely to face some serious competition from other home buyers. Here are some tips to help you navigate through this home buying season:
- Get Pre-Approved
By obtaining a pre-approval for a mortgage before you start your home search, you’ll know how much buying power you really have. Not only will a pre-approval give you a good price range to work with, but it can also make seller more likely to choose your offer. In the perspective of the seller, they are faced with multiple bids; but pre-approved offers typically stand out from the rest because it indicates a buyer is prepared and ready to buy.
2. Choose a Sharp Real Estate Agent
While it’s already difficult to navigate a real estate purchase without a real estate agent in the normal markets, it’s going to be extremely difficult to get the house you truly want without a great real estate agent in a seller’s market. You should be looking for an agent that not only has proven their expertise of the local markets, but someone who is highly responsive, efficient, and will work hard for you to get your dream home at the right price.
3. Establish Price Discipline
If and when a competitive bidding war happens, it’s very easy to get carried away. Before you start shopping around for homes, set firm and realistic limits for yourself on how much you’re looking to spend. In this competitive seller’s market, its likely you’ll need to make quick decisions and it’s much easier when you have an agreed-on price in the back of your head before going into these situations, especially if you’re going through negotiations with another person like a spouse.
4. Don’t Be Picky
When the demand for homes is high and the inventory of homes is limited, it’s not the best time to be looking for your “dream home” that checks all of the boxes of your desired features. You will need to prepare yourself to adjust your expectations so you are not disappointed by the reality. Only make exceptions to your criteria for things that can’t be changed. For example, you can renovate the kitchen or add on another room, but you can’t change the home’s location or lot size. These are important things to consider when shopping for a home in a seller’s market.
5. Forget About Lowball Tactics
In a buyer’s market, you could possibly get away with submitting an offer that’s well below the asking price. But in a seller’s market, that tactic will be nothing but a waste of time for you and all parties involved. Competing buyers often bid above the initial asking price to ensure they will get the home, so if you want to stay in the game, your bid should be close to if not higher than what the seller’s asking price is. Talk with your real estate agent about the best bidding and pricing strategy.
6. Consider if New Construction is Right for You
You may start your home search with the intention that you’re looking for an already existing home on the market. But, if you’re not finding the home you want currently in this seller’s market, consider looking into new construction in your area. You may find that the new construction in your area has better pricing or availability. You may need to weigh factors such as your work commute or your children’s school commute if the new construction is farther away than the areas you were looking previously.