8 Tips For Buyers In A Seller’s Market
If you’ve been shopping for a house any time recently, you understand that it is crazy out there! In Cincinnati and Northern Kentucky, we are experiencing roughly a 30% decrease in inventory dating back to 2016 and a 25% increase in sales price.
This low supply of housing inventory coupled with a high demand from many buyers makes it a seller’s market. So, how do you buy a house in a seller’s market?
We’ve put together a video and blog post to help you get the house of your dreams and beat out the competition. Watch the video below and read the rest of this post for 8 tips for buyers in a seller’s market.
Tip #1: Get pre-approved
Tip #1 is go get pre-approved from a lender. Before you start shopping on Zillow, Trulia or any other real estate website of choice, you need to speak with a lender to find out what you can afford. You don’t waste your time and emotional energy falling love with a house you can’t afford.
Plus, when you go to submit an offer, you need to be able to show a strong offer to the sellers. If you submit an offer without a pre-approval in a seller’s market, there’s a good chance you will lose out to other buyers.
Tip #2: Get a top-notch real estate agent
There are many reasons you’ll want to work with a good real estate agent in a seller’s market. An experience real estate agent will have crafty negotiation skills that can help you win in a multiple offer situation.
Plus, with homes going within days and sometimes hours of the listing, speed matters. A top real estate agent in Cincinnati or Northern Kentucky will help make sure you see the properties as they are hitting the market and help you move fast to get the house you want.
And remember, the seller is paying for your real estate agent, so it doesn’t cost you a thing! There is absolutely no reason why you wouldn’t want to enter a client relationship with a real estate agent when you are buying a house because their commission will come out of the seller’s proceeds. So, get a top agent to work on your side!
Tip #3: Be ready to move fast
The average days on market is always lower in a seller’s market and houses move quickly. So, when new inventory becomes available, you need to be ready to move fast.
There are a couple of tips here. First, nail down exactly what you are looking for. It may take seeing a few homes in person before this criteria gets honed, but you don’t want to waste time looking at a house that won’t work for you.
Second, be willing to adjust your schedule to see a home during the week. If you can take a lunch break or see the home during the weekdays, this gives you an advantage over people who can only see houses on the weekend. It’s never easy to adjust your schedule, take time off work, get childcare or any other obstacles, but being able to move fast in a seller’s market may be the difference in getting the home of your dreams.
Tip #4: Place a fair bid
When going to place an offer in a seller’s market, you don’t want to over pay, but you also don’t want to miss out. Typically, in a seller’s market the list price to sale price ratio is quite high.
Work with your real estate agent to look at recent comps of homes that have sold and come up with a strategy for your offer.
Tip #5: Make your offer more attractive
There are additional ways you can get creative with your offer, besides making a higher offer price, that will make it more attractive.
One way is that you can put down more earnest money to show the seller that you are serious. Another way is to do everything possible to make the transition easier for the seller. For example, if they want to leave behind the playpen or the piano, let them! You can always get rid of those things later.
A third way is to be flexible with the closing date. Let’s say the seller needs an extra 30 days to stay in the house. Can you wait 30 days if it’s really the house you want? Sure! You can beat out other buyers by making your offer more attractive in this way and being flexible.
Tip #6: Write a personal note to the seller
This tip is gold. Don’t underestimate the power of emotion in the sales process. Almost any seller has some kind of emotional attachment to the home they are selling, and if you can share your story and why you want to buy the house, it can go a long way in winning the bid.
In fact, we’ve seen several times where a seller will accept a lower offer because they are excited about the buyers who will be living in the house.
So, take the time to write up a 1-2 page story of why you want to buy the house and deliver the note with the offer.
Tip #7: Decide where you can compromise
In a seller’s market, it’s possible you might not be able to find a house that has every single item on your wish list. Take the time to figure out your non-negotiables such as the size of the home, location and style. Then, take the time to work on a list of items where you could compromise on – perhaps a finished basement, updated kitchen, etc.
If you can expand your criteria and add some areas where you can compromise on, you have a better chance of buying a home in a seller’s market.
Tip #8: Exercise patience
There’s nothing more frustrating then getting excited about a house and then when you schedule a showing, it goes pending. It happens all the time in a seller’s market.
Homes move fast and for higher prices than you would expect.
When this happens to you as you are house hunting, take a deep breath and be patient. The right home will come if you stay focused and are diligent. Just be prepared, that it will be more challenging than in a buyer’s market. 😉
At Team Sztanyo, we help buyers find their perfect home even in a seller’s market. If you are looking to buy a house in Cincinnati or Northern KY, give us a call. We’d be honored to help you buy the perfect home for you!