In many parts of the country, potential homebuyers are noticing the low number of homes for sale. According to many real estate analysts, the situation looks like it’s not going to change any time soon, as demand for housing is out pacing available inventory. That’s why it’s more important than ever to know the best way to purchase your next home in a seller’s market.
Why Would You Want To Buy A House In A Seller’s Market?
With mortgage rates hanging at record lows which means you may be able to purchaser a more expensive house but keep the payment within your budget. While there is a lot of coverage about the negatives of buying a home in a sellers’ market, there are also some benefits if you keep a few key things in mind. The following information could help you make an informed decision and help you get the home you want at the right price.
How Do You Get the House You Want in a Seller’s Market?
With demand for housing increasing faster than supply, home buying in some areas of the country could soon qualify as a competitive sport! Here are some tips to help you come up with a winning bid if you live in one of these areas.
- Educate yourself. First, it’s important to find out what it takes to buy a home. A first understanding of the home buying process, and partnering with an experience real estate agent, will help ensure you have the information and tools necessary to start the home buying process.
- Know what you want. In a tight real estate market, being decisive is key. Establishing a list of deal breakers before you start your home search will help avoid quick and emotional decisions.
- Get pre-qualified. After a bit of research, speaking with a lender will help you confirm whether how much house is within your budget and make sure you’re financing matches up with your goals. When you’re ready to purchase a home quickly getting pre-qualified will help to show the seller you’re serious about your offer and a lender has reviewed your application.
- Have a number in mind. With the currently limited supply of lower- and mid-priced homes you will need to decide what payment fits your budget. Looking at homes beyond that range in hopes that a seller will accept a lower offer is a strategy that works best in a buyer’s market.
- Have financing lined up. Be prepared with a pre- qualification letter and have your down payment ready to go. Buyers who can close the fastest typically have the advantage with sellers.
- Be prompt. You will want to make sure you are ready to act once you’ve selected a home you want to make an offer on. Having your documentation prepared and responding promptly to any negotiations could set you apart from other offers.
- Show them the money. Expect to put more money down when you are submitting your contract. The more you can put down the more serious you will look. This is known as earnest money and it shows the seller you are serious about your intention to purchase.
- Minimize contingencies. In a seller’s market buyers are more likely to make concessions than the seller. That may mean adapting your closing schedule to theirs. It also means that contract contingencies may make it more difficult to get an accepted offer.
- Be ready to walk. When purchasing a home, especially your first home, it’s easy to buy into emotional decision-making. While appeasing the seller will get the sale done, that doesn’t mean skimping on essentials, like a thorough inspection, or overpaying for the condition of the home are good long term decisions.
Purchasing a home is a big decision and a long term commitment which can seem a little overwhelming. This is why it is important to do your research and work with experts who can guide you through the process. When you’re ready to embark on the home buying journey Patriot Federal Credit Union has the expertise and experience to get you to the finish line!