Buying a home is a daunting process. Let’s say you’ve been smart and done all of your homework. Your finances are sound, your income is stable, you’ve used a mortgage calculator and have saved and scrimped in order to accumulate a down payment. You know where you want to live. Now you’re in the same pool as thousands of other homebuyers who have done the same, all fighting for the lowest rung on the property ladder.
How on earth do you negotiate a smart home purchase in a seller’s market?
A home in a popular neighborhood isn’t going to stay on the market for very long, which means that buyers will need to jump the moment the property is listed. The ideal time to tour the home is within the first 24 hours because it provides hard and fast proof to the seller of the buyer’s interest. These kinds of tight timelines can be disorienting for home buyers, especially considering it’s not unusual to see offers pour in on the same day of the home’s listing. It means buyers will need to have done all of their research on the neighborhood’s zoning laws and home buyer restrictions prior to looking.
Sellers are primarily concerned with how buyers are prepared to pay for the home:
- Best offer: Buyers who slightly bid under the listing price in a seller’s market will likely be disappointed. This tactic won’t give the seller the confidence they need to choose the low-ball offer. It may be difficult to do, but buyers should really lead with their best offer to get the seller’s attention.
- Finances: Cash is always going to be the most attractive for a seller, but few buyers will have that kind of savings to pay cash in a seller’s market. There are many types of mortgages available, though the next best offer to an all cash offer is usually a conventional loan rather than a VA or FHA loan. Buyers may even want to be proactive when showing the seller that they have the income and assets to ensure the loan will go through. They may make copies of financial statements or submit their portfolio for the seller’s consideration.
Add Some Extra Perks
Buyers who know a little about the seller’s situation may be able to use other tactics to secure the home. For example, are the sellers in a hurry to close the sale? If so, the Sidney new home buyer can expedite the process by offering to streamline the paperwork by waiving certain contingencies. Most sellers value convenience so if a buyer is giving them a chance to limit the hassle of a home sale, it can be enough to sacrifice a better offer that comes with more strings attached.
Find an Agent Who Knows
The right real estate agent is always going to make it easier for buyers to get the home they want at the price they want. It’s all too easy for buyers to get caught up in the excitement of a bidding war during a seller’s market, working themselves into a panic that they’ll never find a property as good in such a tight market. At Michael Cowling & Associates, we can not only advise buyers of how to approach the home sale, we can also remind our buyers of their real priorities during an emotional time.
When it comes to buying in a seller’s market, preparation will be crucial to getting a deal. From the square footage to the seller’s financial circumstances, knowledge really is power to securing a property in a popular neighborhood. Buyers should take time learning their preferred neighborhoods and picking the right real estate agent if they want to get results.
Source|The NealEstate Team, WhichMortgage
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Michael Cowling & Associates