If you are considering buying a home, you’ve likely been watching the market. Are houses getting cheaper? Are they getting more expensive? How is the greater economic situation impacting your local real estate market?
All of these are great questions – and absolutely ones that you should be asking; regardless of whether you are buying or selling a home. An experienced real estate agent watches these trends and can subsequently help you to make the right decisions about your next steps in your real estate journey.
In the greater metro D.C area we are in a seller’s market. The characteristics that are contributing to this seller’s market include:
- Low available inventory of homes for sale
- Higher demand from buyers than available inventory
- Low interest rates
How to take advantage of a seller’s market, as a buyer
{Looking for more info on how to take advantage of a seller’s market, as a seller? Check out our recent post on selling in a seller’s market}
If you are buying a home in a competitive market, it’s easy to feel intimidated or as though you won’t be able to find the right home for the right price. This is not the case – it’s simply that now is the time to be prepared and decisive in your home buying efforts.
Some things that you can do to increase your odds of finding your dream home in a seller’s market include:
Make sure your financial house is in order before you apply for a mortgage. You’ll need to be sure that you can get preapproved for a mortgage, so make sure you take the necessary steps to prepare yourself financially for a mortgage. A preapproval letter is absolutely essential in a seller’s market if you want to be competitive.
Watch the Coming Soon listings. Your Realtor can set you up with a feed of listings that will be coming to ‘Active’ status in the near future. These are only automatically entered into the Multiple Listing System and are not syndicated out to sites like Realtor.com or Zillow. When you see a property come on the market and go under contract almost immediately, it’s probably because someone was watching it in Coming Soon status. And while you can’t tour Coming Soon listings, you can put an offer on them – you can then time it so you can see the home before your earnest money deposit is due. The listing will go straight from Coming Soon to Under Contract! I’ve successfully had offers accepted this way several times recently. Remember you can only get a Coming Soon feed from a Realtor.
Tailor your offer for the seller. Your agent should contact the listing agent to find out what the seller is looking for in an offer. Sometimes non-financial factors such as closing date or whether the seller can rent the property after closing can be the defining factor when multiple offers are in hand.
Keep it as short as possible.When sellers have a number of offers available to them, they are more likely to choose the one with minimal contingencies or requirements. Because of this, it’s not uncommon in a seller’s market to see other buyers reducing or even removing their contingencies to make their offer more competitive. If you must have contingencies such as home inspection or septic system inspections, keep those as short as possible.
Make it strong, too. Now is NOT the time to go in with a low ball offer. Your offer price is one of the most influential factors that sellers look at, so going in with one that is competitive for the current market is key. Consider an escalator addendum – this means your offer will increase by $xxx over the highest offer up to a certain price. The listing agent needs to provide proof of the other offer before this applies.
And remember:
Buying in a seller’s market can feel like a challenge, but as long as you take the time to prepare your financial health and act quickly when you’ve found the right home, it can certainly be a great time to buy as well.
Next steps
Having an experienced real estate agent to guide you through the process can make all the difference. Not only in the efficacy of the sale, but also in the journey that goes along with it. Be sure to choose an agent that is a skilled negotiator and familiar with the current market trends in your region. These two factors can help you to ensure that you have a fair and appropriately priced real estate transaction as a buyer.
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