AgentsBuyers February 20, 2018

10 Tips for Buying in a Seller’s Market

Key Takeaways:

 

  • Seller’s Market = Demand Exceeds Supply
  • Be Ready – Remove Barriers to your Move
  • Get Approved & Make Strong Offers
  • Work with an Aggressive Professional

 

What is a “Seller’s Market”? This is a marketplace where the demand for housing exceeds the available supply. It is mathematically defined as a market where there is less than 5 months of available supply on the market. This means that if everyone stopped placing new homes for sale, it would take 5 months to sell out the remaining/existing inventory. A “Buyer’s Market” is defined as an environment where supply exceeds demand and there is more than 7 months of available supply listed for sale. Here is an article for Sellers about the current market.

 

I suppose in a perfect world none of us would need to buy a home in a seller’s market, where housing supply is low, and the sellers tend to hold more cards at the negotiation table. Much to my chagrin, the world is not perfect. Life, happens. Jobs shift and change. Children grow and leave the nest. Communities shift and change along with our needs for a home. So, inevitably you may find yourself in the position of needing to make a move during a low-supply and high-demand time we call a “Seller’s Market”.

 

10 Tips if you find yourself in this situation:

  1. Be ready to move quickly. Speed and clarity are power in this situation. You need to be more nimble than the other buyers who are out looking. This is about having the right mindset as well as having your financial ducks in a row.
  2. What do you want? It is critical that you have a clear and defined list of your housing needs, prior to beginning the active search for a property.
  3. Why do you want it? Understanding the true motivation behind your housing needs will assist you in finding alternatives and thinking strategically when it comes time to make an offer
  4. Get approved for financing. The last thing you want is to lose out on the home because you did not have financing set up and the seller went with another offer while you scrambled at the last minute.
  5. Look for homes in your price range or even a little below your price range. Do not look at property with the assumption that you can “Talk the seller down” on their price. In a seller’s market, that won’t happen.
  6. Make strong offers with few contingencies. You can “Clean Up” an offer and put yourself ahead of the competition by removing barriers and fear from the transaction, for the seller.
  7. Use an Escalation Clause. Don’t know what that is? Contact one of our licensed Real Estate Advisors to find out.
  8. Focus on the long-term. Sometimes it can be frustrating to buy in a market that you do not control. It is easy to let fear take over and wonder if you are buying into a bubble or making a bad decision. Like any housing move, it is all about the long-term perspective. If you are buying the home for the right reasons, the home satisfies all your needs, and it is in your price range, then you are set up for success.
  9. Write a letter to the seller who is receiving your offer. This is one of those very simple, “Tricks of the Trade” that goes a long way. A personal letter to the seller, along with your strong offer, makes a compelling and personal case for why their home is perfect for you. Sellers are people and they can be swayed a surprising amount by the personal touch.
  10. Work with an aggressive and professional Realtor. The right Advisor can set you up for success with a knowledge of homes that have yet to hit the market, assisting you with making rapid decisions, structuring an offer so that it is likely to be accepted, and giving you priceless counsel in what can be (but doesn’t have to be) a stressful process.

 

 

 Questions?

 

I hope this list has been helpful to you. Should you, or anyone that you know, have any questions related to this post, please do not hesitate to reach out via phone, email, or text. We are passionate about helping others along their real estate journey.

– Nick Schlekeway