Looking for the perfect place to call home? We’re currently in a seller’s market, so now’s a hot time to buy. We’ve seen a spike in homes selling over the past year and a half, and mortgage rates are still at all-time lows.
So, what is a seller’s market anyway? Great question! It’s when there's more demand for homes than there is supply, and the homes that are available today might be gone as early as tomorrow. In this kind of market, sellers tend to have more leverage than buyers. This is due to the high influx of buyers bidding on available homes, which can often cause bidding wars that drive the price of the home way up. Some buyers will even go as far as waiving common requests like home inspections to seal the deal faster and beat out other competition.
Buying a home in a seller’s market can be extremely challenging and overwhelming, but we can help you navigate through these mercurial waters to secure the perfect place you’ll call home.
First thing’s first, before you start searching for your dream home, get pre-approved for a mortgage loan. By getting pre-approved, you’ll know exactly how much buying power you have. Plus, when you start putting offers in on homes, you have the upper-hand over those who may have skipped this step. This will also show seller’s that a lender has verified your finances and creditworthiness and that you are serious about sealing the deal.
If you’re interested in applying for a mortgage, our experienced and trustworthy Mortgage Consultant can help. Call 1-800-641-5036 and learn about our mortgage options and how you can apply. Once you complete your application, here’s what you can expect. First, we’ll pull your credit. Then, we’ll ask any necessary follow-up questions. Lastly, your conditional pre-approval letter will be mailed to you, giving you the go-ahead on your house-hunting journey.
Get the Right Real Estate Agent
Now that you’ve got your pre-approval in hand, you’re going to need a real estate agent, but don’t settle on just anyone.
Before hiring a real estate agent, perform your due diligence. Check out their reviews or talk with friends and family members who may have first-hand experience with them or see if there’s someone they can recommend. Once you’ve narrowed down your search to one or a few agents, don’t be afraid to ask questions to make sure they are a good fit for you. Here are some questions you may want to consider asking them:
How familiar are they with the neighborhood you’re interested in?
How can they make your offer stand out in a competitive market?
Do they have access to properties that aren’t listed yet?
What are their fees?
Once you’ve chosen the best realtor for your needs, make sure they know your preferred method of contact and establish the expectation for them to be highly responsive to you. Lack of good communication can cause you to miss out on a good home. Remember, it’s a seller’s market and homes are going quick, so every second counts.
Don’t Be Surprised by Sticker Shock
The hard truth about purchasing a home in a seller’s market is that the demand for inventory is driving up the prices of homes—and it’s pretty significant. Bidding wars are taking place on practically every available home that’s out there, and homeowners are getting well over their asking price. Being outbid time and time again is a harsh reality you may face.
Don’t despair though, use this knowledge to your advantage and look for homes under your budget. By doing so, you’ll have the ability to bid up without dipping into your savings or going over your budget.
Be Prepared to Compromise
We all have a mental image of what our dream home looks like. Maybe you’re envisioning a home that has four bedrooms, three bathrooms, two fireplaces, a pool, and sits on a couple of acres of land. You could try to hold out until you find a home that checks all those boxes but be prepared to be flexible with your must-have list.
During a seller’s market, the inventory of homes is limited because of how quickly they get scooped up, so you may not find exactly what you’re looking for. The good news, though, is that an extra bathroom or a pool can always be added at some point down the line. However, you can’t change the size or location of the lot, so make sure to bid on homes that meet the bones of your requirements.
Don’t Fall in Love with Just One Home
While you’re searching, be careful not to get stuck on one home. Not only can this lead to heartbreak if you’re outbid, but it can also lead to poor financial decisions. Now, that doesn’t necessarily mean you have to walk away at the first sign of defeat. You can position yourself as a good second choice in case the deal falls through.
When house-hunting, you may also want to consider new construction. If you aren’t finding the existing house of your dreams in your preferred neighborhood that’s in your price range, new construction might be worth exploring. You may find better availability and pricing in new construction and the added bonus of the ability to customize some of your home’s features.
Since inventory is so low, listings for homes during a seller’s market don’t usually last very long, some are gone within a day! So, whether your search criteria entails existing or new homes, be diligent in your search. Keep a constant eye on new listings and set up tours as soon as possible. Be prepared to make quick (and smart) decisions to beat out your competition. You’ll also want to forgo negotiating for a lower price since competing buyers will likely bid over the asking price. Your bid should be close to, or slightly over, the asking price if you want to secure the home.
Say Yes to the Address with GOLD
Buying a home during a seller’s market can be tricky, but it can be successfully accomplished. If you’re ready to say yes to the address, GOLD is here for you to help make your home buying dreams a reality.
We’ve got mortgage products that have been designed with you in mind. All of our home loans feature competitive rates and fees, flexible terms and down payments, and a dedicated Mortgage Consultant to guide you through the home buying process from pre-approval to close. Speak with our experienced Mortgage Consultant today to find the mortgage product that’s right for you: 1-800-641-5036.
From all of us at GOLD, happy house-hunting!