By JANE ROWLEY | Special to the Palisadian-Post
With mortgage rates at historic lows and pandemic-fueled desire for homeownership and outdoor living, 2021 continues the trend of increased demand across much of the country.
When demand exceeds supply, as we are currently experiencing, we find ourselves in what is known as a “seller’s market.” In a seller’s market, homes typically sell quickly, and buyers will be in competition against a pool of other buyers.
What does this mean for someone looking to purchase in a seller’s market? Simply put, sellers often have more leverage than buyers, and buyers face stiffer competition, ultimately resulting in rising home prices.
Coupled with the unique experience of a global pandemic shifting how we view the importance of our homes and the lifestyle they provide, housing production shortfalls, and a shift in family spending toward housing, we have landed ourselves in an unprecedented hyper-competitive seller’s market.
It’s not all bad news however, as savvy buyers can still secure the home of their dreams by follow these five practical tips.
- Be offer ready: Get pre-qualified/pre-approved and show proof of funds. Show the seller you are serious about making the deal a reality. It also helps you better understand your true purchasing power and allows you to establish price discipline. This has the added benefit of narrowing down your buying criteria, ultimately saving you time and energy. Look for homes under your spending budget so you have room to bid up if needed.
- Make your best offer: A seller’s market is not a time to negotiate, and time is of the essence. If you see a home you love, act immediately as there will likely be other interested buyers. Be ready to submit a strong offer and make your best offer first. Be prepared to pay more than the asking price if the home meets your buying criteria and is within your budget. Understand that this is not the time to cut a deal, get discounts or ask for repair credits. Don’t let a 15-year-old washer-dryer set be the reason you don’t get your offer accepted.
- Offer non-price considerations: Some sellers will consider a lower price if the buyer can provide non-price factors. Consider having a flexible escrow timeline to suit the seller’s needs, or waive appraisal or financing contingencies to sweeten the offer. Also consider increasing earnest money deposits to show your sincerity and commitment to completing the purchase. Asking price notwithstanding, a higher offer doesn’t always win out—understand what terms the seller is looking for and consider matching their expectations.
- Add a personal note: Not all sellers are motivated by price. A personal letter from a buyer could help you standout in a sea of similar offers. Leading with the heart can be compelling to longtime homeowners who have a sentimental attachment to their home. If the property has historical architectural significance, let the homeowner know you intend to honor the home’s significance.
- Work with an experienced agent: Having a seasoned agent on your side with proven local area expertise can be the difference between winning or losing a home, and often a successful buyer’s secret weapon. Look for an agent who can provide key insights regarding current and future inventory, can provide accurate market comparisons and guidance on market prices, and is highly responsive and efficient. A real estate professional will not only advocate for the best deal terms, but they will save you significant time and stress.
Ready to buy or sell your home? Whatever your real estate goals, our mission is to help you invest smarter, live better and love where you live.
Jane Rowley (DRE #0211015) is a sales partner with Amalfi Estates.
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