In a hot seller’s market, getting the house you want is challenging. You’ll likely be competing with several other homebuyers for each property, and negotiations will be tense. Being the top choice takes tenacity, patience and determination. To end up with the home you want, follow these steps for navigating the homebuying process in a seller’s market.
Know When It’s a Seller’s Market
In a nutshell, a seller’s market occurs when there are more buyers than sellers. When this happens, houses move fast and offers need to be more competitive (often over asking price). You can get an idea of whether it’s a seller’s market by looking at how long houses are staying on the market in your area.
Save Every Dime You Can
Money wields power in the mortgage process in general, and especially in a seller’s market. More earnest money, a bigger down payment, and a better overall financial picture may be the things that inch you above the other buyers. During your homebuying journey, slash expenses and stash as much cash as possible into a savings account.
Get Pre-Approved
Nothing shows the seller you’re more serious about purchasing their property than being pre-approved. By working with a loan officer, you can get proof that you qualify for the funding you’ll need for your mortgage loan before you make an offer. This reduces the seller’s risk of accepting your offer only to have the deal fall through because you can’t get a loan.
Work With an Experienced Real Estate Agent
It’s always smart to find a talented real estate agent, but it’s an absolute necessity for successfully navigating a seller’s market. This is especially true if you’re a first-time homebuyer. A savvy agent knows the neighborhoods, pricing trends and inventory levels. A real estate agent has expert insight and is key in crafting an offer that sellers will accept and guiding you during negotiations.
Know What You Want
Don’t spend your time looking at homes that don’t offer your must-haves. Make a realistic list of what you can’t live without. Narrow this down to five items or less. This exercise helps you stay focused on the amenities you value most, so you can find the property that meets your needs.
Decide Quickly
In a hot seller’s market, houses sell within hours. You can no longer take a few days to think about it before making an offer. If you find a home that fits your must-have list, you don’t want to miss out. Make a thoughtful, but speedy, decision about making an offer.
Offer More Earnest Money
Double or triple the amount of earnest money you submit along with your offer. This, of course, depends on how much cash you have on hand (see above). More earnest money makes you stand out from the other buyers, gives the seller an impression of financial stability, and shows you’re serious about purchasing the property.
Write a Personal Note
Homeowners are typically attached to their properties. When they sell, it’s often with mixed emotions.
As a buyer, you can show them why you’re the best choice through a personal letter. Start by telling them a bit about your family, why you want to buy their house, and how you can see your family living in the house. Sewing in front of the window? Playing croquet in the fenced-in backyard? Cooking your favorite recipe in the big kitchen? Be authentic and heartfelt, and end by saying how grateful you would be to buy their home.
While a note won’t automatically win the home for you, if you’re up against a buyer with the same offer, the letter may be the thing that tips the scales in your favor.
Remember All This Is Worth It!
You may read this and think it’s too hard to buy a house in a seller’s market. No, it’s not! A seller’s market poses greater challenges, but it shouldn’t keep you from reaching your homebuying dream. You simply need to do a bit more planning up front, hire a real estate agent, get pre-approved, and be ready to make an offer when you find a home that meets your needs. When you’re comfortably ensconced in your new house, you’ll look back and know it was worth the effort.
