How to Get Your Dream House in a Seller’s Market
Over the past few years, many housing markets across the country have been experiencing low inventory thanks to a shortage of homes entering the market and a lack of new construction. It’s a seller’s market in many places – demand is exceeding supply, and buyers are facing stiff competition for many of the homes that are on the market. When sellers can have their pick of great offers, how can you stand out from the crowd and get your offer accepted? Should you make an offer above the asking price? Should you write a buyer’s letter?
There are several things you can do to beat the competition and get an offer accepted on your dream home. It’s a good idea to scope out the local market before you begin house hunting, and prepare by getting a loan pre-approval and finding a good realtor to work with. Make your offer as appealing as possible by being flexible with the seller, waiving contingencies, and offering above asking price if you can afford it.
Scope Out the Local Market
Before you start house hunting, it’s a good idea to scope out the local real estate market yourself. If you want to look at Dilworth Charlotte, NC homes for sale, for example, start by walking or driving around the Dilworth neighborhood to see what the area is like – you might decide you don’t want to buy a house there after all.
If you like the look of the neighborhood, go online to look at some home listings. Take note of how fast new listings go under contract – the hotter the market, the less time homes will spend on the market. Also take note of what homes in your desired neighborhood(s) are selling for and how those prices compare to the asking prices.
Get a Loan Pre-Approval Letter
A loan pre-approval letter from your lender shows that you’re able to qualify for a loan and that you’ve found a lender to work with. Realtors and sellers alike will take your offer more seriously if it comes accompanied by a pre-approval letter. Showing that you can qualify for financing and reassure sellers that the deal will go to close if they accept your offer. If you really want to guarantee financing (and waive your financing contingency), ask your lender for pre-underwriting as well. Then you’ll be guaranteed to get a specific loan amount.
Find a Good Realtor
You’ll have more trouble than is strictly necessary getting an offer accepted if you try to represent yourself in the deal. Sellers typically pay realtors’ commissions, so working with a realtor needn’t strain your budget. An experienced buyers agent will understand the nuances of your area’s real estate market, and can help you put together an offer that will appeal to sellers.
Offer Above Asking Price
In a hot seller’s market, you often have to offer more than asking price to get sellers to consider your offer. That doesn’t mean you have to cough up tens of thousands more for a chance to get into a house. In many markets, just a few thousand above asking will get attention. Go back to your research to find out how much above asking others are paying to move into your desired neighborhood(s).
Waive Contingencies If You Can
Contingencies in an offer can give you an escape hatch from the deal should, for example, your financing fall through or the home inspection turns up something egregiously wrong with the home. But a clean offer, without contingencies or seller concessions, will be more appealing to most sellers. A clean offer promises a smooth deal and a fast close.
However, waiving contingencies can be risky. For example, if you waive your home inspection contingency, you could end up in a home that needs major repairs, with no recourse. If you waive your financing contingency, you could end up losing your earnest money if your financing falls through. Make sure you understand the risks of waiving contingencies before you do it.
Be Flexible with the Seller
Often, what will set your offer apart from the others isn’t the size of your deposit, the amount you offer, or even a heartfelt buyer’s letter. It’s the willingness to be flexible and sensitive to the seller’s needs.
Indicate that you’re willing to do a leaseback if the seller needs extra time to find a new place, or that you’re willing to dispose of any furniture that the seller leaves behind. These extra considerations can take some of the pressure off the seller, and may make the difference when he or she is considering various offers.
It’s easy to get discouraged when you’re trying to buy a home in a seller’s market. Don’t give up. You may not get the first house you bid on, but with persistence and the right approach, you’re sure to find a house you can love.
