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June 11, 2020
Imagine this: You’ve just walked through the front door of a beautiful home, newly listed for sale. The size is perfect, the neighborhood is ideal, and it’s within your price range. There’s just one problem – it’s filled with other potential buyers! They all seem to love it as much as you do, and by the end of the day, multiple offers prove this to be true.
Believe it or not, this is what buying in a seller’s market can be like. These so-called “hot markets” are where housing inventory is low and prices are relatively high. And while these conditions are prime for sellers, they can make the process more challenging for homebuyers.
However, for many, buying a home in these markets is a battle worth fighting for – especially as rent prices continue to climb and interest rates remain near historic lows.
To navigate a seller’s market, you’ll need to beat out the competition. Fortunately, we’ve got some tips to help position yourself for success and find your perfect home.
Tip #1: Get Preapproved
Buying a home is a two-way transaction. As much as it may feel like it’s all about you, remember that there’s a lot at stake for the seller, too.
Here’s where NewRez can help! Getting pre-approved, or having your lender verify your ability to afford a home loan for a specific amount, lets the seller know you’re qualified—and motivated. It demonstrates financial security, giving the seller confidence that the sale will go smoothly with you as the buyer. The process is different than getting pre-qualified as pre-approval requires documentation and is not based on estimates.
Tip #2: Hire an Experienced Real Estate Agent
Hiring a real estate agent, especially one with experience, could give you a serious advantage when buying a home in a competitive market. Find a real estate agent who has a proven track record of winning offers, and who hears about listings as soon as they hit the market. In a seller’s market, things move quickly. Your agent should be on the frontlines, keeping you in the know at all times.
Tip #3: Act Fast
In a seller’s market, a listing today could be a memory tomorrow, which means you can’t always wait for that weekend showing. Try to be flexible and make yourself available for showings as listings become available.
After you’ve seen a home and you’re comfortable moving forward, consider submitting an offer on the spot. Sometimes agents will begin the negotiation process onsite with the buyers stationed outside. This way, the agent can modify the offer if needed to expedite the process.
Tip #4: Place a Fair Bid
No one wants to pay more than necessary for a new home. But you also don’t want to risk losing the right house by submitting a lowball offer. Work with your real estate agent and research comparable home sale prices in the area to determine an offer strategy. At the end of the day, you have to be comfortable paying what you offer.
Tip #5: Make an Attractive Offer
There are several techniques to help your offer stand out among others. Here are just a few:
It all really comes down to demonstrating your seriousness and willingness to make the process easier for the seller.
Tip #6: Write a Personal Note to the Seller
Many people develop an emotional attachment to their home, and sometimes moving can be difficult for the seller. Show them that you’re both serious and emotionally invested in this sale by writing a personal letter to them. Tell them why you love the place and how you plan to take care of it. The seller may be glad to know their former property is in good hands, giving you some leverage in the situation.
Tip #7: Decide Where You Can Compromise
Everyone has an image of the perfect, move-in ready home. Although when you’re searching in a hot market, it may not be easy to find. Do some soul searching and consider what matters most to you in a new home. Is it the size? The style? The location?
Once you’ve figured out your must-haves, then consider making compromises on those less-important features.
Tip #8: Be Patient
You may encounter some stiff competition out there. Above all else, stay focused on your goal, and try to be patient. The right home is out there. Equip yourself with these tips and soon you’ll be the one packing moving boxes!
No matter what market you’re shopping in, let NewRez help you get into your dream home. Use our mortgage calculator to estimate how much home you could buy and get your mortgage process started by contacting one of our Loan Advisors.
Stay tuned to our articles for more helpful homebuying and mortgage tips.