3 Tips for Buying in a Seller’s Market

By Ryan Dosen

 

Homes remain in short supply and buyers are starting to get frustrated. Many areas are seeing legitimate seller’s market conditions, and unprepared buyers are finding themselves swinging and missing, or sometimes not even getting a chance to see homes as they pop on and off the market in a day or two.

For many areas, gone are the days when buyers could arrogantly take their time circling over homes like vultures waiting for their prey to finally weaken and be victimized. Many have forgotten what it’s like to be in a seller’s market, but if you’re looking to buy a home this spring, you need to be prepared to act and to act quickly.

Tip #1: Get Preapproved Before You Start Looking at Homes

When it comes time to submit an offer, you’re going to need to show the seller that you’ve been preapproved for a mortgage sufficient to buy their home. Many buyers still think that they can casually browse the homes available and delay preapproval until they find the right home. This is a mistake.

Sitting down with a mortgage professional for preapproval may only take 30 well-spent minutes. You’ll know what you can afford and you will leave the meeting with the paperwork you need to submit your offer. If you kick the can, it could take a day or two to get your meeting with the mortgage professional, and a day or two (or even hours) could be too long to wait in today’s market.

Tip #2: Hire a Top Local Agent

It is common nowadays for people to sit at home browsing Trulia or Zillow to see what homes are available on the market. Many think that they will wait until they see house they like online, and then reach out to an agent whenever that time comes. This is another big mistake.

It takes time for listing data to syndicate out to the commercial sites. By the time you’re seeing homes on these “syndicated” websites, agents have already known about them for a while and have already lined up showings for their existing clients (and may already be preparing offers). The best homes and best deals are hammered with agent requests as soon as they are listed. The home may be gone by the time you wait for Zillow to find out about it, then reach out to an agent, then get them to agree to show you the home (after they’ve already shown it to their existing clients), and then proceed to throw together an offer.

Time is of the essence if you’re going to be buying a home today. The best way to be able to act quickly and confidently in this competitive market is to align yourself with a top local agent that is in the trenches every day fighting for homes in your market. There is no substitute. Anything less and you’re probably not going to get the best deals or best homes.

Tip #3: Be Prepared for a Bidding War and to Be Aggressive

In the right neighborhoods, our well-priced and well-marketed listings have been typically selling in the first few days, sometimes with multiple offers, and usually at or above asking price. We’ve spoken with several agents that have, at times, not even received a response after submitting solid, full-priced offers for their clients.

It’s not a feeding frenzy for everyone, but that’s why you need a good agent. You need to know if there will be a feeding frenzy. If there will be one, you need to be well prepared for it. Larger down payments and proof of funds documentation will give sellers more security that the deal will go through. Smaller inspection periods and earlier mortgage commitment dates will also help reassure sellers that their home will be off the market for less time if something goes awry. Also, discuss with your agent whether you should think about using an escalation clause that could raise your offer if another offer comes in higher.

Homeless Sellers

An email was circulated around our office this week from a desperate agent. Her clients are faced with the reality of potentially being homeless in a couple months. Their home is under contract and will close in June, but they’re having trouble buying their next home. Not for lack of trying. They’ve been beaten in multiple bid situations on 3 homes already and they’re starting to panic. They will find a home, but they may have lost out on their best fit because they underestimated the competitiveness of today’s market. If you’re a seller, it’s obviously a great time to list. Make sure you get a top agent that will properly market and price your home so that you can maximize your return during this favorable market.

If you’re a buyer, you should also saddle up with a top agent immediately because one of the most important decisions of your life is possibly going to have to be made during a tight window of just a few crucial hours.

This article was published by 21st Century Media and the Daily Local News (West Chester, PA). To read this article on the the newspaper’s site, please visit the Daily Local News.

 

 

To view all of Ryan Dosen’s 21st Century Media real estate columns, visit http://www.dailylocal.com/search?text=dosen.