Tips For Buying a Home in a Seller’s Market
If you’ve decided to buy a Greenville home this spring, your challenge will not only be finding the right home but also beating out all the other home buyers who like it.
This season is without a doubt a seller’s market and you don’t want to be caught off guard in a seller’s market. Working with a buyer’s agent is beneficial for you because you can rely on your buyer’s agent’s advice about what you need to do in this market condition.
Time is of the essence. A well-priced home in good condition and great neighborhood is usually snapped up very quickly and often with multiple offers so you have to move fast. Remember, in a seller’s market there is low inventory and more home buyers.
How can you get the edge in a multiple offer situation?
Here are some tips for buying a home in a seller’s market so you can still get the house you want this spring:
Get your finances in order
Before you even start looking at home, you should get your finances in order. Your credit plays a big role in determining whether you’re qualified for a loan and how much interest rate you’ll get, so as much as possible you have to get your credit score in good shape. Get a pre-approval so you know how much home you can afford realistically. By knowing how much you can afford, you’ll have a definite idea of your price range and you can target your home search based on your qualification. Also getting a pre-approval can give you a leg up because it means the lender has determined that you are a suitable candidate for a mortgage and this will give the seller an impression that you are a serious buyer.
Move quickly once you find the right home
In a seller’s market, new listings are snapped up within hours of them going on the market. You really have to move quickly once you find the house you like because you won’t be the only buyer looking at that property. There could be others who are already writing offers on it without you knowing.
Work with the sellers
Ask help from your buyer’s agent and find out the sellers plan. He or she could directly ask the sellers or from the sellers’ listing agent. Do they want a quick closing? Do they need time to retain possession? If you know this information, you can structure your offer in a way that would appeal to the sellers.
Start with your best offer
A seller’s market is not the right environment to negotiate a bargain or request favors. This is your only chance to make an offer. In a competitive market where there is multiple offer situation, you should start with your best offer.
Make a big earnest money deposit
In a multiple offer situation, a large deposit or earnest money can indicate that you are serious about buying their home. Ask your agent for advice on the deposit then consider doubling that amount. You’re going to pay it anyway at closing.
Make a large down payment
Putting a large down payment can also be advantageous in a multiple offer situation. It shows your strength as a buyer because you are disciplined to save a large sum of money to put toward a home. A large down payment especially if it’s 20% can qualify you for a lower mortgage rate. You won’t also need to pay for Private Mortgage Insurance.
Write a personal letter to the sellers
Not everyone writes a personal letter to the sellers, but if you do, you’d probably catch their eyes because it shows your sincere intention to buy their property. If you truly like the home, include a personal letter and a family photo with your offer. While some sellers are interested only in how much money their sale will yield, there are sellers who would love their home to go to a new family that will love it just as much.
Make a backup offer
Some deals fall apart. If you found the right home even if the home already has a pending contract, there’s nothing wrong with making a backup offer. You could be in the first place if the initial buyer walks away.