If you’re looking to purchase a new home in a seller’s market you are likely to hit a few barriers; limited inventory and increased competition from other buyers, just to name a few. The best offense is a good defense so be sure to get pre-approved with a reputable lender and have hearty funds on hand for a down-payment. Accept that you are trying to buy in a seller’s market and prepare yourself to be patient until the home in your area and price-range comes along.
While you’re waiting for that one home to come on the market, use the time to become familiar with listings in your area. Pay particular attention to listing prices in comparison to the amount a property actually sells for. Most local real estate agencies have a link on their website for sold properties. In Waterville, Campton and Thornton, NH, single family homes are selling for an average of 91% of the listing price. Keep this in mind when you’re putting together an offer, you don’t want to submit an offer that’s so low the seller doesn’t even counter-offer.
Also in a seller’s market it’s important to be conscious of any “extras” you are asking for in your offer. A seller is likely to be more interested in an offer that requests a seller concession if the buyer is willing to pay the full listing price. Asking a seller to pay closing costs and/or complete some specified repairs before closing coupled with a low offering price won’t make your offer very competitive. Keep your offer clean with few contingencies and present your highest and best price. A seller’s market is no place to try to negotiate a bargain.
Let the seller know you are serious about buying their home by giving them a deposit equal to 5% or more of your offering price. This is especially true if you will be financing the purchase of the home. Sellers know that financing takes time and they have an appraisal requirement so showing cash upfront will show them you are a buyer in good-faith and will put them at ease.
Partner yourself with an experienced real estate agent in your area. You can choose to work with anyone who has a license but you’ll get the most benefit from someone who has been doing this for a while. Ask your friends and co-workers for referrals and then take the time to interview more than one to ensure you are choosing the sales agent that’s best for you. Look for an agent that’s honest with you and is an experienced negotiator.
Stick to your budget! You know how much you can comfortably pay for a monthly mortgage payment, don’t get caught up in a bidding war and end up purchasing a home you can’t afford. Keep your financial goals in the forefront and increase your savings while you’re house hunting. It will help you make a larger down payment and you’ll also have funds available after the purchase to deal with any unplanned repairs.
Being a strong, successful buyer in a seller’s market requires you to consider each and every aspect of your offer carefully. Put your best foot forward with your initial offer and shape it in a way that meets the seller’s needs without busting your budget.