I think everyone by now has heard the phrase “it’s a seller’s market,” or “the market is hot right now.” The market lately has been crazy. There aren’t enough houses available for potential buyers because they are selling as soon as they hit the market. This trend has continued for a while, and it doesn’t appear to be ending anytime soon. When you set out to buy a home, whether it is your first or third (like us), it can be extremely overwhelming, especially If you aren’t prepared. Today, we are sharing our top tips for buying a home in a seller’s market so that you can take that next step on your home-buying journey confident and ready!
We just wrote a post for first time home buyers, if that is you CLICK HERE.
1. Work with an Experienced Agent!
Buying a home in a seller’s market is tricky! Houses move quickly on and off the market. Having an experienced agent is a huge benefit. Honestly, it is super important no matter what, but especially in a hot market! Sometimes they have “insider” knowledge of a house that will be on the market soon that you can get first dibs on before it is listed.
An experienced agent will also help when you go to put in an offer. They can advise you on the best strategy to win the bid, and advise when to walk away.
It is common knowledge that the housing market often fluctuates and an experienced agent who is in-tune with the market trends may be able to help in predicting an upcoming market shift.
As I mentioned in my previous blog, First Time Home Buyer Tips, A good realtor should:
- Consistently communicate with you
- Be willing to take you to multiple houses/open houses
- Work with your budget and not press you to push your limits
- Know the area you are looking in REALLY well
- Have a great portfolio of houses they have sold in the past
We love our realtors! Teresa and Vince are incredible and will go over every detail with you. If you are in the Columbus, Ohio area, reach out to them HERE. We also have many friends that use Sam and Craig Buehler and hear great things.
2. Make your Best Offer, Fast!
In a seller’s market, if you really want the home, you have to put your best foot forward. That means taking a risk sometimes. Trying to go in under asking price, usually isn’t the best strategy. If the home is priced well, which your agent should be able to tell you, then you will likely lose the house by going in under asking price. Click here to read more tips on negotiating in a seller's market.
In Addition, sometimes there isn’t much time to process or think about it. The rapid pace of the market right now doesn’t allow for hesitation. You must act quick or risk losing out. Keep checking realtor and zillow as you wait.
3. Look at Houses Below your Max Budget
In a seller’s market, bidding wars are common. Bidding wars drive up the purchase price, sometimes a considerable amount. To counter this, look at homes slightly under your budget to provide a cushion in case you find yourself in a bidding war over your dream home. In the end though, I don’t recommend stressing yourself out or your budget by going largely over your budget. You do not want to be “house poor!” If it comes down to a bidding war, and the price just continues to rise out of your comfort zone, I recommend walking away. Another house will always come around. I promise! To figure out your budget for a new house, we suggest using a mortgage calculator. This will at least provide a starting point!
4. Pre-qualified or Pre-approved
When attempting to buy a home in a seller's Market, having a pre-qualification or pre-approval from the lender shows the seller that you are ready and committed. It also communicates that there won’t be a lot of hang-ups as you close the deal. It sends the message that you have done your homework, and are credible and serious about finding and purchasing a home. This article discusses the difference between pre-qualification and pre-approval, and provides additional resources.
5. Be Flexible
Unfortunately for the buyer, you might not get all the must-haves on your list. In a hot market, sometimes you have to settle a little to get into a new home. You have to prepare yourself for this reality. Know ahead of time what you are willing to give up should you find a house that checks off other boxes on your must-have list.
It is also important to remain flexible when it comes to closing the deal. Attaching stipulations to your offer may turn the seller off, especially if they have multiple offers or viewings. Since Sellers tend to have the upper hand, it is best to submit a clean and direct offer with no contingencies. However, I do recommend being flexible and accommodating to the seller. For instance, if they need to remain in the home for a certain amount of time or till a certain date, accommodate them if your situation allows it. Find more advice HERE on buying a home in seller's market.
6. Consider Waiting …
If this buying frenzy has you stressed and irritated consider waiting until the market slows down. It is extremely frustrating to continually view and fall in love with homes just to have them ripped out of your grasp. In many hot-spot areas, houses are receiving multiple offers their first day on the market. Needless to say, the home-buying process can be very emotional. For that reason, if your situation is flexible, consider waiting. This post lists different items to consider when deciding whether or not to buy a home in a seller's market.
On the flip side, you could also consider staying in your home and renovating/updating it. I know this isn’t everyone’s cup of tea, but improving your current home is always an option and one I happen to love!
If you have more tips you learned during your home buying process or have more questions about buying a home in a seller’s market, contact me! You can also check out my other blog posts for tips on buying, building, or remodeling a home!
Remember, progress > perfection.
Mason and Liz