Buying a Home In a Sellers Market? Tips for Success
It's hard to be a new home buyer in a seller's market. Under these market conditions, many buyers must make several offers before one is finally accepted. Being prepared and making a competitive offer can help. If you've never bought a home before and are unfamiliar with the home buying process, here's what you need to know.
What Is a Seller's Market?
A seller's market is what happens when buyers are abundant and not many homes are listed for sale. Usually, those homes that are listed for sale are priced high. Most buyers in a seller's market usually have financial resources and are able to make big offers. Buyers who are on a tight budget are often shut out of the market and find it difficult or impossible to buy a home.
What Can Buyers Do to Be Prepared?
Buyers who want to purchase a home must position themselves to make the most competitive offer they can.
Keep the Price Range Realistic
In order to make a competitive offer on a home, buyers must ensure that they're looking in a price range they can afford. Sometimes this means that the buyer must purchase a "fixer upper," or a small starter house. This is especially true of first-time home buyers who have limited resources.
Prepare to Make a Large Earnest Money Deposit
The earnest money deposit is the deposit that the buyer puts down as soon as the offer is accepted. A big earnest money deposit indicates that the buyer is motivated. Sellers are attracted to offers with big earnest money deposits because this indicates that the buyer is committed to the purchase.
It's very hard to get a good deal in a seller's market. Buyers who decide to negotiate usually lose to buyers who do not. Buyers have the best chance of success if they come in with a strong offer from the start.
In a competitive market, sellers are unlikely to accept offers from buyers who are not pre-approved. Getting pre-approved is just one more step that buyers must go through before starting the home buying process. Those who don't get pre-approved may have a long and frustrating journey ahead of them.
What If You're on a Tight Budget?
Buyers who are on a tight budget are often beat out by buyers who are not on a tight budget. In this situation, patience is necessary. Sometimes, buyers on a budget must wait for the market to cool and for their financial situation to improve. For those who must find a house immediately, sometimes looking in a different community can open up options.
Working with a real estate professional can help. A good real estate professional can help home buyers find the right community, the right home and at the right price. A good real estate professional can also help a home buyer make a good offer. Buying in a seller's market can be stressful, but working with an experienced real estate professional can make the experience rewarding and fruitful.
Ready to Get Started? Contact a Real Estate Professional
If you're an Eagle Ridge home buyer who would like to purchase a home in a seller's market, the first thing you should do is contact a knowledgeable real estate professional. A good real estate professional can help a struggling home buyer through the purchasing process.