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What You Need to Know About Buying a Home in a Seller’s Market
Whether you are a first-time homebuyer or experienced in the challenges of purchasing a residence, the current seller’s market can be hard to navigate. Fortunately, we have compiled some helpful tips for buyers in our guide below.
We will discuss some of the most decisive factors that will influence your chances of getting your dream home. We’ll even address some of the residual effects of 2020 that are currently impacting the market.
By implementing these strategies, you can find the perfect home and put in an offer that will be hard for sellers to refuse.
Be Prepared to Pay More than Asking Price
The recent surge in demand for homes has increased listing prices throughout the nation. With that being said, it’s important to have realistic expectations when you’re searching for your dream home.
The high demand for homes has led many sellers to rely on a “highest and best” approach if multiple offers come in on a home. When this happens, the sellers may set a predetermined period of time in which they will accept offers.
The current homeowner will entertain offers for the duration of the bidding period. At the end of it, they will choose the “highest and best” bid.
If you have your heart set on a home that’s being sold using this method, be ready to pay more than the asking price. However, you can also use strategies to enhance your offer like shortening the inspection timeframe, paying your own closing costs, or offering extended possession after closing to give the seller time to move their belongings to their new home.
Make Your Offer Competitive
With the demand for homes at an all-time high, it is vital that you make your offer competitive. While the seller will certainly pay particular attention to the dollar amount of your bid, it is not the only factor that influences the strength of your offer.
There are several ways that you can entice a seller to accept your offer. These include:
- Offering to buy the home “as-is” or limit your repair requests to a certain dollar value
- Shorten the timeline for home inspections to be done
- Make a larger down payment, which can show that you’re well qualified to buy
- Covering your own closing costs, rather than asking the seller to pay them
Each of the options above can make your offer more appealing to sellers because they address the common obstacles in the homebuying process. The best part is that these choices may allow you to avoid paying well over the asking price, while still landing your dream home.
Getting a Preapproval Is Essential
In the current seller’s market, homes are getting sold fast. That’s why it’s so important to have a mortgage pre-approval letter in hand before you even start looking. Doing this will allow you to put an offer in quickly while showing sellers that you’ve done the work upfront to ensure that you’ll be qualified to purchase the home.
When you’re obtaining a pre-approval, keep in mind that you may likely need to pay more than the asking price to win a bid for a home. Therefore, it is a good idea to focus on homes that are at least 8-10% cheaper than your pre-approval amount.
By working with knowledgeable real estate professionals and implementing these proven tips, you can weather the competitive seller’s market and land the home of your dreams.