What to know when buying a home in a sellers market.
As we’ve seen lately, the market is starting to make a shift toward a sellers market in Southern California.
In a sellers market, there are some important tips to remember when buying a home. A sellers market can be a challenge for buyers, but not an insurmountable one.
Here are a few things to keep in mind when looking for a home in a sellers market:
- A lender’s letter that says your credit rating has been examined and you can afford to buy the home carries a lot of weight. It tells the seller that you are serious and qualified. It says you are ready to buy and have already committed to lender. If the seller has a higher offer from a buyer without a pre-approval letter, your offer will likely win.
- An agent who constantly combs the marketplace and networks with other agents is more likely to get a lead on your new home before anybody else, which is why you need to hire The Lawhead Team.
- You probably won’t be in a strong negotiating position when in a sellers market. With buyers beating a path to sellers’ doors, sellers are not as likely to look favorably on your low offer. They also may not consider offers with contingencies or seller concessions. Simply put, this means write your very best offer. You might get only one chance to make an impression on the seller, so don’t make a low offer hoping the seller will give you a counter offer. If the seller has received multiple offers, the low offers most often are not even considered. They are shoved into the rejected pile. Figure out the top dollar you are willing to pay for the home and offer that price.
- If you make an offer below asking price, chances are you may get laughed at and the seller won’t entertain any other offers. There is usually a good chance someone else has already made an offer above asking price.
- Be ready to act quickly. Get your financing lined up, know what neighborhoods interest you, decide what features are most important in a home, and figure out what compromises you’ll make if necessary.
- If you are able to pay “all cash” for a home, say so. Although it’s always “all cash” in the end to the seller, even if the buyer obtains a loan, a transaction that is not dependent on receiving loan approval is more attractive to a seller.
- Unless there are extenuating circumstances, many sellers prefer to close within 30 days or fewer. If you can offer a 21-day closing time frame, that might be more important to the seller than an offer for more money and be just the edge you need to beat out the competition.
- If you’re still trying to figure these things out when you find a desirable home in a sellers market, chances are someone else will beat you to the punch.