A seller's market is a market where the number of buyers exceeds the number of properties being sold, and the prices are high as a result. A seller's market can happen during times of economic prosperity and in areas of the country where property is especially valuable. Buying a home in a seller's market can be difficult. Staying competitive under these conditions is important. There are many ways that this is done.
Get Preapproved for a Loan
Paying with cash isn’t possible for everyone, so for people who can’t, a mortgage is necessary. However, getting approved for a loan can be time-consuming. Buyers should look into getting preapproved for a loan before starting to look for a new home. As stated earlier, being preapproved isn’t a guarantee that the buyer will get a mortgage, but it’s an important first step that proves they have the credit score and income necessary to purchase a home with.
Gather A Big Down Payment
A big down payment looks good to home sellers, because it signals to the seller that the buyer is prepared. Buyers who want to purchase a home and who want to have their offer accepted quickly can have a smoother home buying experience by saving money in the months and years before starting to look for a home. Having a lot of money on hand for a down payment can help save money on mortgage interest and can make an offer more attractive to the seller.
Have a Large Cash Deposit
The average amount of a cash deposit, also called an earnest money deposit, is typically about 1-2%, or $1,000-2,000 if the home being purchased is valued at $100,000. Buyers trying to purchase a home in a seller’s market may want to have a 3% cash deposit to show the seller they’re serious about buying the home. If the market is especially competitive, the buyer may even want to go higher if they are able to. In some cases, the seller may even request a certain amount of money for the cash deposit, in which case it may be in the buyer’s interest to go above that amount.
Pay With Cash
Sellers tend to favor buyers who want to purchase a home with cash instead of a mortgage because there’s no need to deal with applying for a mortgage, which can be a time-consuming process. Sellers also like cash offers because they’re less likely to fall through than a mortgage, which can potentially be revoked even if the buyer was preapproved.
Make The Offer First
The first offer on a house in Chugiak is always going to stand out to the buyer, so making the offer first gives buyers an edge over other offers that will come later in the home buying process. This is especially important if the buyer is on a tight budget. If a buyer cannot afford to offer much or anything over the asking price of the house, making the offer first ensures that the homeowners will have nothing to compare the offer to.
Add an Escalator Clause
An escalator clause can be extremely useful when offering on a home, especially when there are other offers. What an escalator clause will do is tell the homeowner that the buyer will increase their offer should someone else offer more for the home. It shows the homeowner that the buyer is serious about the home and also helps prevent the buyer from being outbid.
Home sellers may be less willing to negotiate when they know they have a good chance to get a high offer. Buyers who know which house they want must start by putting their best offer forward at the very beginning. In some cases, this may involve offering more than the asking price, especially if the asking price is very reasonable.
There may be rare occasions when it makes sense to offer less than the asking price. If a house is priced very high for the area, the real estate agent may recommend making an offer that goes slightly under the asking price. Home buyers must work with a real estate agent to determine when making an offer below the asking price makes the most sense.
Offer to Pay Closing Costs and Extra Fees
A good offer usually involves more than just more money. Home buyers who want to load their offer with perks can include a flexible move out date or a waiver of certain contingencies. An experienced real estate agent can help a home buyer decide which contingencies to waive. For example, some home buyers paying cash may decide to waive the financing contingency. This reduces risk for the home seller, which makes the offer more attractive. Buyers can run into trouble when they waive contingencies if they don't do it intelligently, so consulting with a real estate professional is important.
When purchasing a home, both the buyer and seller will each have different closing costs they will have to pay for such as home inspections, attorney fees, property taxes, and so on. In order to help sway the seller, buyers may include offering to pay their closing costs as part of their official offer. Sellers may like this sort of offer because it means they get to save thousands of dollars.
Work With the Seller’s Schedule
Selling a home takes time, and one small thing an Eagle River buyer can do to help win over a seller is to include in their offer that they are willing to work on the seller’s schedule through the buying process. One way of doing this is by offering a lease back if they can’t find a home to move into, which means the buyer of the home will be the sellers’ temporary landlord until they are able to move out. If the home is a short sale, the buyer should make sure the seller knows they can wait for the bank’s decision on the home.
Work With An Experienced Real Estate Agent
Working with an experienced real estate agent throughout the home buying process is important, especially when there's a lot of competition for real estate. Working with a good real estate agent can help home buyers get an edge over other buyers. If you're hoping to buy a home in a seller's market, contact an experienced real estate agent in your area. Your real estate agent can help you narrow your search and make an offer that will stand out to buyers.