5 Tips for Standing Out as a Buyer in a Seller's Market
Hunting for a new house during a seller's market means you'll likely run into a ton of competition. When inventory remains tight and home prices are on the rise, the seller's market is in full swing.
Buyers need to enter this type of market with a game plan. Here are five tips to help you stand out as a buyer in a seller's market.
Get Your Finances in Order
Your finances come first when shopping for a home. Sellers prefer to work with buyers prepared to buy. All-cash buyers are almost always preferred, but a pre-approved buyer comes in a close second.
Before you start shopping for a new home, get pre-approved by a lender. Make sure they go through the entire process of checking your credit and verifying your income. Getting a pre-approval letter will put you in a better position to compete with other buyers.
Get Rid of the Contingencies, When Possible
With the real estate market favoring sellers, it's less of a necessity for sellers to accept offers with contingencies. If you submit an offer contingent on the sale of your current home, you may receive a rejection from the seller. It could be necessary to close the sale on your current property before you make an offer on another property.
Even though submitting an offer without contingencies will help you compete, there are some contingencies you don't want to skip. For example, you don't want to skip the home inspection and you may want to be careful when waiving a financing contingency.
Use an Escalation Clause
An escalation clause allows you to provide your highest offer without starting with it. In a seller's market, escalating your offer is a great way to level the playing field. It's a safe way to make your offer stand out because the seller will know you're willing to pay more for the property.
When you submit an offer with an escalation clause, your offer will be raised if you're outbid. You will set a maximum price and how much you're willing to escalate the price whenever you're outbid. This ensures you can compete in a bidding war without the need to make an offer higher than necessary to get the contract.
Keep the Offer Simple
Loading up an offer with simple things, such as asking for the swing set or a dripping faucet to be fixed won't help make your offer competitive. Instead, keep the little things out of your offer and negotiate them once you're the prime contract.
Move Quickly and Aggressively
When you first start home shopping, you're in research mode. It may take multiple open houses and showings to find the right home. Once you find the right home, move quickly and be aggressive with your offer.
Well-priced homes will get offers in just a few days in a seller's market. If you wait too long to make an offer, you may miss the opportunity. Move quickly with your offer and make sure it's an aggressive one.
Trying to buy a home in a seller's market requires the right strategy. With the help of a professional real estate agent and these five tips, you'll be prepared to compete for the home of your dreams.
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