5 Strategies For Buying in a Seller's Market
If you have been paying even a little bit of attention to the current real estate market, you will have heard that it is a seller's market and desirable homes in desirable locations have been receiving offers well over market asking price. If you are considering selling a home, now is a good time to make that consideration a reality! Trim the bushes, clean out the clutter and stage, and see what worth you can put in your pocket.
But what if you want to buy your first home, or a second home, or downsize? Is now the right time to consider that with the constant bidding wars of "best and final" and low housing inventory?
The answer is .... maybe? It depends on several things. For some, now might not be the best time. The better strategy might be to keep saving and wait until some of the whirlwind ends. For others, have a plan so you can maximize your offer to be the strongest one at the table.
Get pre-approved for a loan - Yes, have the lender run a hard credit check, review all of your pay stubs and W2s, and dig into your financial history. A pre-qualification is good, but it is just a surface check and will not hold as much weight as a full pre-approval. Having that solid check by your lender will show that you are not only serious about buying, but your lender is ready to loan you the money.
Shop below your maximum cap - Your lender sends you the email with the pre-qualification or pre-approval letter with the max amount of money that you can borrow and you are ready to dive in. Do not plan on shopping for homes at the top of that amount. If you do, you will be disappointed when you are beat out by over list price offers. Shop for homes that are under your cap so you have a buffer of money to bid over the asking price.
Shop homes that have been active on the market greater than three weeks - Just because a home isn't sale pending in less than five days doesn't necessarily mean there is something wrong with it. It could be over priced to start, might need more updating that most buyers want, who knows it could be anything! Decide if that home is right for you, don't judge it by other's opinions.
Find a realtor that you connect with - And trust! Just because a realtor has 20 years experience doesn't mean that's the right person for you. A new agent might be more aggressive in the search or more willing to take additional time to answer questions and explain the home buying process. Interview your perspective realtor, ask questions about their availability to show homes, if they work in a team with other agents, and what areas they are willing to cover. Be comfortable with the responses and don't feel pressured. It's perfectly fine to say you don't think it's a match.
Don't get frustrated - Home shopping can take time. In a perfect world you walk into the first home and fall instantly in love and know it's the right home for you. More than likely it will take several home viewings before you find the right one. In the current sellers market with less inventory and more buyers, you may even view more as sellers quickly get offers and are homes are longer available. Be patient, practice yoga breathing, and believe that the right home will become available.