Winning in a Sellers Market
The market is really hot right now and favors sellers, so it can be frustrating to be a buyer right now. I want to give you some tips to navigate the market and succeed in your home search.
I strive for clients to have a hassle-free, fun experience. With that in mind, part of that is having a good strategy, especially in our current market where homes are coming on and off the market so quickly. So here are three tips (and a bonus!) on how to navigate a sellers market as a buyer.
1. Have your financing in order and a pre-approval in hand.
You don’t want to find your dream house and then have to go back and get pre-approval. A lot of people think pre-approval will go smoothly because they have a great credit score and well-paying job, but you never know what complications will come up. Have all of that sorted out so you are able to make an offer on a home you love as soon as possible.
You should also shy away from big banks and online lenders and from changing your financial situation during closing. Big banks have a poor track record of closing on time and sellers will often pick someone else who has more reliable financing. If you work with our team we will connect you with a good local lender for you situation. Doing something like getting a new credit card can also disrupt closing, because it changes the math for lenders and therefore the terms of your loan.
2. Shop below your pre-approval or max budget.
Having your pre-approval on hand allows you a realistic look at what houses you can shop for. If you are pre-approved for $500k, shop for houses that are in the $480s. In this market, it is unrealistic to expect to negotiate down too much.
Looking at houses listed just below your max budget is not only realistic, but allows you the chance to bid up on a house you really like. Having that flexibility will help you to ensure you can impress a seller with your offer.
Now if a house listed just above your price range has been on the market for awhile, then maybe you can try and negotiate. So again, if your budget is $500k, then you might be able to look at a house listed for $510k or $515k if it has been on the market for a couple months, but don’t expect a big price drop after only a few weeks.
3. Be aggressive & be decisive
If a house you like comes on the market, see it right away! Don’t wait until the weekend. The best ones will be gone in 24-48 hours. Because of all the stress around COVID, sellers don’t want to do a lot of showings. If they get a great offer right away, they will probably take it and go under contract so they can stop showings. Or they will often put out a deadline for highest and best offers by Saturday or Sunday.
So don’t say “I’ll wait and think about it for a few days.” If you really like it, make an offer… you always have the option period to think on it more.
Put your best offer first. You could start negotiating and have someone come in with a slightly better offer and the seller will just accept it and move forward with them. They want an easy transaction.
Bonus: Use the right tools
People get frantic and start looking at a bunch of different sites to make sure they don’t miss anything. You’ll drive yourself crazy. We have our site update every 15 minutes and we take off homes that are under contract. Sites like Zillow will show the home as For Sale for weeks after it’s under contract.
Check out the Compass app. We use it to collaborate with our clients, but it also shows the most current status plus you can save and track it, with instant updates.
So those are just a couple quick thoughts. We want your search to be enjoyable and a fun start to the next chapter of your life. In a tight market like this, it can get stressful if you’re taking a frantic, reactive approach.