Data from the 2021 housing market indicates that it’s currently a seller’s market; housing demand is high, and homes are even selling for amounts above their asking prices in some areas. If you’re a potential homebuyer, you may wonder how to buy a house in a seller’s market. Here’s what you need to know about purchasing a home when the market favors home sellers.
1. Put Your Best Offer First
A seller’s market isn’t the time to try to procure a fantastic deal or haggle your way to a better price. Instead, when you submit an offer, make sure it’s your best possible offer. You may only have one chance to purchase the home. If the seller receives multiple offers, you want to ensure that you’re communicating your top price and your accepted purchase conditions from the beginning.
2. Examine All Aspects of Your Offer
Obviously, when you submit your offer, you’ll state the price you’re willing to pay for the home. It’s essential to look at the other components of your offer to see if there’s anything you can change to make your offer more attractive to the seller.
For example, you might offer a shorter closing period; if your seller needs to move quickly, this detail could sway them to accept your offer. Or, you may shorten the period for contingencies. Instead of stating that you have three to four weeks to obtain a home inspection, you can shorten this period to three to five days.
3. Fortify Your Homebuying Fund
One common issue when purchasing in a seller’s market is that the home may not appraise for the asking price. This can make it difficult or even impossible for the homebuyer to obtain a mortgage on the home (especially if the homebuyer was counting on a loan with a low downpayment requirement).
Sellers are often unwilling to come down from their accepted offer price, especially if they have multiple people trying to purchase the home. If possible, have some extra money saved in your homebuying account so that you can bridge the gap between the appraisal figure and your offer amount.
4. Be Ready When You Start Looking for Homes
If you’ve wanted to take some time to research how to buy a house in a seller’s market or check out potential neighborhoods, see that you’re in full purchase mode when you start browsing available homes. Make sure that you’re ready to put an offer in when you find a home that meets your needs.
Get pre-approved for your mortgage if you’re using a loan, and obtain a pre-approval letter so that sellers know you’re a serious buyer. Look at your budget so that you know how much home you can afford. Don’t forget to consider items like real estate taxes and property insurance in your calculations.
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