How to Buy in a Seller's Market

Posted by Jessica Akright on Aug 04, 2016 05:00:00 AM

Topic: ALL

Husband and wife receiving keys to their new house

When the inventory of homes for sale is low, there’s usually a higher demand – which means several buyers may be competing for the same property and drive up the price.

How can you get the house of your dreams in a seller's market?

  • Get pre-approved.  When you have a letter indicating you’re been pre-approved, you’ll be able to make an immediate offer and assure the seller you’re a legitimate buyer.

  • Do your research. Know the type of home you want and neighborhoods you’d consider. Check with your realtor to ensure homes there are within your budget.

  • Make an honest list of needs versus wants.  What could you compromise on if you find a property that’s almost what you want?  Know where you are willing to be flexible; you may need to make some quick decisions!

  • Stick to your budget. Don’t be drawn into a bidding game if the house is over your budget.  In a seller’s market, homes sell fast and often above the asking price.  Stick to your budget range, and be patient.  Even if you lose a couple bidding wars, it doesn't mean you need to spend beyond what you can afford.

  • Don’t offer too little.  A good realtor can tell you what other homes in the area have sold so you don’t offer too little on a well-priced home that is getting a lot of interest.

  • Offer more cash.  It’s no secret; money talks.  You might convince a seller to select your offer if you can offer more earnest money (deposit) or a larger down payment. 

  • Be ready to compromise.  Don’t list contingencies in your offer that could be deal breakers, like asking the seller to leave appliances, a pool table, or large-screen TVs if they’re not listed as inclusions. If you want the deal, keep minor additional requests out of your offer.

  • Be flexible with timing.  Is the seller building a new home with the move-in date still up in the air? If needed, can you stay where you are longer to give the seller more time? 

  • Make an emotional appeal   A note sharing the ways your family would enjoy the home have won over many home sellers. Can you see your children doing homework by the fireplace? Would you look forward to taking over the fantastic job they’ve done with landscaping? Can you find the key that makes them only want you to move in?

  • Don’t hesitate.  Don’t let what you don’t know stop you from making an immediate offer if you absolutely love a property. You’ll have at least a couple weeks for due diligence such as a home inspection, and getting answers to other questions. If you find something that changes your mind, you can cancel your offer by the due diligence deadline and get your earnest money back. 

Buying a home in a seller's market isn’t for everyone. If you are looking for a "deal" it may not be the right time for you to buy at all.   Decide if you’re up for the challenge and the stress. You may want to wait a bit longer until the market changes and more homes become available or consider building instead. 

Consult with a Loan Officer near you