A “seller’s market” in real estate means that there is low inventory. It means that there aren’t many homes for sale on the market to meet the demand of buyers, and therefore there is more competition among buyers. This can inspire bidding wars and multiple offer situations, which is great for sellers—this means they have a greater chance of selling their home for more than listing price!
However, for buyers, this can create some challenges and stressful situations. Will you have to make an offer that’s more than the listing price? How do you write a competitive offer? What should you expect in a multiple offer situation?
There’s a lot to consider, and your real estate agent is there to guide you through the process and give you the best advice to help you win and and find success in your unique situation. Here are a few things you should be doing to buy a house in a seller’s market:
1. Get pre-approved before you even start looking at homes.
Before you even start searching for a home, get your finances in order. In a seller’s market, the last thing you want to do is fall in love with a home only to miss out on the opportunity because your finances aren’t in order yet. Make sure you’re in a position to buy a home, research and find mortgage financing, and get pre-approved. You’ll want to act as if you’re going to put an offer on a home right away—because in a seller’s market, you might need to be prepared to act immediately.
2. See a home in person ASAP.
If a home hits the market, make plans to visit it in person as soon as possible. If it’s a Tuesday, for example, don’t wait until the weekend—the home could be scooped up already! (Yes, it’s hard to believe, but there is some serious competition in some markets!) Make plans to see the home that evening or the next day if possible.
3. Be prepared to make compromises.
You may not be able to get everything you want in a home in a seller’s market. Maybe you can get a home for the price you want in the location you want, but it needs repairs. Or maybe you find the perfect move-in ready home in the ideal location, but it’s more than you wanted to spend. When the seller’s have the upper hand, you need to be ready to make compromises. Make a list of things you absolutely must have in a home, and make a list of “would be nice” items to help you sort out your priorities. And get ready to adjust as necessary!
4. Have as few contingencies as possible.
You’ll want to make your offer look as appealing as possible to a seller, and this means having few or no contingencies. There are several different possible contingencies—for example, one contingency may be that you can only purchase this home if your current home sells. When a seller is receiving multiple offers, having contingencies may make your offer look less appealing to a seller who wants to sell.
Would you like more tips on buying a home?
Take a look at our Buyers Guide!
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