As another year opens as a clear seller’s market, many buyers are eager for an edge: so we’ve gathered our best tips for buying in a seller’s market.
Maybe you’re wondering what you need to know to secure the perfect home. Or you’re hesitant, and asking yourself if you should simply wait the market out. Certainly when home inventory is low, and competition is high, sellers have an advantage, but that doesn’t have to keep you confined to a house that’s no longer a fit, or condemn you to getting a bad deal on your next home.
Tip #1: Put your realtor’s research to work for you: make a fair offer
In this market, sellers are more likely to receive multiple offers, so while you can often still make a first bid that’s below list price, it’s best not to be too aggressive by lowballing your offer. Your realtor will have assessed comparable homes and be able to give you a realistic idea of where to start your negotiations.
Also talk to your realtor about their recommendation on factors that may become negotiation points, like due diligence money or any repairs you can ask the homeowner to make post-inspection.
Tip #2: When buying in a seller’s market, be ready to act
Have your pre-approval letter and all your financial paperwork ready . Be mentally prepared to act fast. A shortage of available homes means sellers have little incentive to be patient—another offer is likely already on the table. Sellers may send back a counteroffer, or ask multiple buyers to resubmit their best offer. Be ready!
It does pay to be respectful and kind during the process, as well. We don’t recommend going overboard, but sometimes the winning offer comes down to the deal the seller likes most.
Tip #3 Know your maximum before submitting your first bid
This means knowing how much you’re prepared to spend overall, as well as how large a mortgage you’re pre-approved for. And if you get caught up in a bidding war, remember that a mortgage won’t cover more than the home’s appraised value—so unless you’re willing to cover the gap, the sky is NOT the limit. Get all your financial ducks in a row before you start shopping, that way if negotiations start to move fast, you’ll be able to jump (without going too far!).
Tip #4: Resist being overly impulsive
Sometimes sellers will push for concessions that you shouldn’t risk, like skipping inspections (never recommended!), or refusing to repair items that would typically be agreed to. This is where keeping a cool head is important. How will you pay for repairs needed after closing? Will bumping that offer up a little higher affect your lifestyle after you move in?
Taking emotion out of a home purchase is always difficult, but it’s one of the most important tips for buying in a seller’s market. This is one of those areas where having an excellent relationship with your realtor is so valuable. Choose someone who cares as much about you as they do about the deal, so they will help you put, and keep, elements of a real estate transaction in perspective.
Tip #5: When competition is high, stay flexible
If you’re working with a seasoned real estate team, they’ll have an intimate knowledge of the local market, which will give you the best odds of coming out of a negotiation with the home of your dreams. Yet in a competitive seller’s market like the one we’ve been seeing in the Cary-Raleigh-Apex NC area, even a terrific offer may not be accepted. Someone else may be willing to go further, faster to get that property. So, staying flexible in as many areas as possible will help deliver the best long-term outcome.
In the end, if you’ve got some wiggle room, whether in terms of neighborhood or street, style or age of property, essential features or even the timing of your move, you’re sure to get a home you’ll love for years to come. We’d be happy to help you put these tips to buying in a seller’s market to work for you—just give us a call.