Getting into your brand new home and dressing it up is the best part of the house-buying process. Unfortunately, the steps before that can present some challenges!
Before putting in an offer, you need to obtain the market value of the property you are interested in, seek financing, and learn to stay persistent during negotiations.
The whole process can become even more complex in a seller’s market as opposed to a buyer’s market.
A seller’s market is when more people are looking to buy a home than there are homes available. A seller’s market creates a cutthroat atmosphere—you and other house hunters will be competing for a select few houses in your area. In these conditions, homes often go for much higher prices than usual.
Instead of giving up and waiting for the market to turn in your favor, you can still successfully purchase a home. However, buying a house in a seller’s market will require more intricate planning. Here are some ways you can get a good deal for a house even when the market is competitive.
Get Preapproved for a Mortgage
Before you start home shopping, get preapproved for a mortgage. Taking this step will help you determine how much buying power you will have. This gives you a lot more credibility when compared with other buyers who neglected to get preapproved.
Don’t Be Quick to Rule Out Imperfect Homes
In a seller’s market, you don’t have a lot of room to be picky. There are limited houses for sale, and not all of them will be exactly what you are looking for.
That being said, you should not wait around for the perfect home to go up for sale. Instead, look at homes that are close to what you want and adjust your expectations.
Make compromises for factors that can be changed. For example, you can always add a bathroom, remodel the kitchen, or install a swimming pool.
In a seller’s market, the house you are looking at will not be available forever. You might regret letting a decently-sized home in the perfect location go to someone else.
Before you cross a home off your list, consider whether its imperfections can be changed later down the line.
Consider New Construction
A lot of buyers opt to purchase older homes. Older buildings are often in more ideal locations and possess a lot of charm and character. Plus, they present a lot of opportunities to increase their property value.
Constructing your own home may never have crossed your mind, but it is worth considering. When you build your own home, you can design it the way you want to fit your style and preferences. It will be move-in ready and involve little maintenance for at least your first few years.
New homes also tend to have better pricing and more availability. However, your newly-built house may not be in the most ideal location. You and your family will need to figure out the commute time to work, school and other activities to determine whether this is a good choice.
You should also consider the additional costs of building a new house. For example, residential buyers in Tampa must pay three impact fees.
To make the most cost-effective decision, you should also stay on top of current news regarding these kinds of fees. There have been discussions about doubling impact fees for certain homes in Hillsborough County.
Keep an Eye on New Listings
In a buyer’s market, you can get away with a casual approach to home shopping. However, this will not suffice in a seller’s market. You need to keep a keen eye on new listings. Once you find a property you are interested in, set up a viewing as soon as possible.
Prepare yourself to make quick decisions. Do not allow other buyers to be more alert and beat you to finalizing a purchase.
Don’t Submit Lowball Offers
The seller’s market is named for those who benefit the most. Your seller will likely not have a lot of trouble finding a willing buyer. Therefore, you should not submit an offer that is well below the asking price. This is likely to waste your time.
To have a chance of securing the house you want, submit an offer that is close to or higher than the asking price. Your Realtor can help you determine the specifics when it comes to the most optimal pricing strategy.
On the other end of the spectrum, you need to establish a price limit before you start negotiating. Do not get caught up in competitive bidding. If you submit an offer that is outside of your budget, you risk years of financial stress down the road.
Consider Waiting
While any motivated buyer can succeed in a seller’s market, it may be more beneficial to wait before you make a purchase.
If your circumstances allow you to, try postponing your purchase until the market favors the buyer. Shopping in a buyer’s market will make the home-buying process a lot less stressful.
However, waiting also carries some risk. There is no way to predict when the market will shift. As you wait, market conditions may worsen and make it even harder to buy a home. A variety of economic factors can cause years to go by before a buyer’s market emerges.
Although, bear in mind that market conditions do not matter if you have the right Realtor by your side. That leads us to the next tip.
Choose the Right Realtor
A Realtor has a lot on her plate, but she should be able to handle it all with grace. Ensure that your Realtor has:
- A quick response time
- Good communication skills
- Plenty of local connections with inspectors, appraisers, and mortgage loan officers
- A solid work ethic
Choosing the right Realtor will help you buy with confidence even when market conditions are not ideal.
Are you ready to secure a good deal for your new home? I am a highly experienced Realtor in the Tampa Bay area. Get in touch with me today so we can work together to find your dream property!