In a previous article, “Don’t be Seduced by a Seller’s Market” I addressed the seller’s perspective in the current market. Now it’s time to reach out to those looking to purchase a home in the current market. Many buyers I speak to are anywhere from a bit weary to just plain intimidated by the seller’s market conditions. To review, a seller’s market exists when the supply of homes is low and the demand for homes is high. Sellers typically have more leverage, homes sell extremely fast, and prices rise. While it is more difficult for buyers when inventory is low, it is not impossible to find a good home at a good value. The principles outlined below will help turn the odds in your favor.
Partner with a great agent
Get to know your agent. They should be enthusiastic and supportive. More than ever an agent needs to communicate well, even on a more personal level, with the listing agent. Phone calls are more productive than texts and emails when competition is high. Your agent should be the one in the listing agent’s ear learning about the seller and the property so your offer will grab the most attention and sway the seller in your favor. Your agent should understand they are going to have to show more houses and write more offers than usual to get you that right deal.
Have your ducks in a row
It’s more important than ever to have your finances prepped and ready to go. Cash is king in this market but obviously that is not possible for most buyers. Work to find a lender that can get you a credit underwritten pre-approval. That is different than simply being pre-qualified. It tells the seller that you are ready to close in a short time frame and the chances of delays are far less. No seller wants to have unforeseen delays come up and they may be more likely to accept an offer from a pre-approved buyer and simply a pre-qualified buyer. Zillow has a great article on the difference between pre-approved and pre-qualified.
Be patient, stay within budget
Yes, you will likely be out bid on a house or two. You may feel like opportunities are slipping by and the temptation is to sacrifice your values and get desperate. Stay within your budget! Don’t get caught up in what I call auctionitis. That’s where you see people get all hyped up and just keep bidding at an auction and end up paying way more that an item is worth. Stick to your principles and your budget. Don’t create hardship down the road for yourself. Be patient.
Keep an open mind
Sometimes opportunity presents itself in different packages than we originally planned on. New construction is on the rise so maybe having a home built will be a good option. Maybe a fixer-upper will offer an opportunity for those with the vision to see what renovations would look like. Sometimes a seller may have issues of their own like having a hard time finding a new home to move into after they sell. If a buyer can give the seller more time, or even rent the home back to the seller, that can make the difference in getting your offer accepted. Offering more earnest money can sway sellers as well. Just be open and work with your agent. Creativity can pay off.
When you find something you like be prepared to act. Taking a few days to think about it often results in lost opportunity. Make your best offer first. There will be offers from other buyers on the table and rarely is there much opportunity for negotiations and counter offers. Be willing to close soon. Again, sellers typically want to have the process done with as soon as possible and the guy that can close quicker just may tilt the table in their favor.
Partner with a great home inspector
Never, ever, waive your inspection contingency. Some people are advising this and I’m hearing horror stories out there from buyers who discovered expensive issues later on. The inspection is vital to ensuring your investment is sound. The inspector has no skin in the game so they give you the straight scoop about the condition of the property. That being said, be sure your inspector can handle a quick turn-around. Sellers don’t want to wait around two weeks just to find out if they need to fulfill repairs or even have a buyer back out. Here at The Peerless Service Company I can usually get you on the schedule within 3 days. I work evenings and weekends to accommodate people’s busy schedules as well. Be realistic with your repair requests. Bombarding a seller with petty issues or major upgrades is seldom productive. ((After the Inspection)) work closely with your agent to handle repair requests reasonably.
If you are looking to buy a home in this market you’re going want a great inspector in your corner. Contact Paul Kruger at (763) 862-9068 or firstname.lastname@example.org or visit our website at www.peerless-servco.com. Don’t let the home of your dreams turn out to be the home of your nightmares.