Give Yourself a Buyer’s Edge in a Seller’s Market
Tight home inventory and huge buyer demand in our current housing market is resulting in multiple offers on homes in our area. Buyers need an edge in their successful competition for a home, especially a home that draws the interest of other motivated buyers.
With more than 20 years of helping clients make strong offers on homes, I recommend several successful strategies to put a buyer at an advantage during what is known in real estate as a “Seller’s Market”.
What is a Seller’s Market?
A Seller’s Market is simply when the number of buyers in certain price ranges and for certain types of homes exceed the number of homes for sale. There are many economic reasons for a Seller’s Market.
During the market “crash”, many home builders stopped building new homes or severely slowed the process. They are back to building now but several years of the lack of new construction has put us behind in available inventory. People who have wanted to move up in the market or scale down their home size, found little to purchase so they just stayed put. Without new homes being built and fewer homeowners selling theirs, there has been a huge decrease in housing inventory.
In addition, a growing economy has also caused an influx of job opportunities, many with higher incomes, that has pushed prices up as the demand for the limited number of homes increased.
What Buyers Need to Know
When you write an offer on a home today, it is highly possible that you will be competing with other buyers. It is very disheartening to spend so much time and effort to find a home and then to lose it to another buyer.
As a buyer in a Seller’s Market here are a few things you need to know to improve your odds of getting your offer accepted.
#1. You Need Your Realtor®
The first, most important step is to find an experienced Realtor who you can trust to represent you and provide the best advice. Believe me, it will lower your stress and give you the confidence that someone highly capable is working in your best interest.
Each seller has different needs and your offer needs to be adjusted to be the most advantageous to them in order for negotiations to be successful. An expert Realtor is skilled at these negotiations.
#2 Get a Mortgage Pre-Approval with a Good Lender
It is important that you interview several lenders to find one that you are comfortable working with. Your Realtor will be familiar with many local lenders and can refer several to you.
Pre-approval for a mortgage helps you gain an edge with sellers over other buyers looking in the same price range. To get pre-approved, you personally talk with a loan officer and provide all the documents needed to qualify for the type and amount of a home loan. With a Pre-Approval letter from your lender, your offer will be much stronger.
#3 Make a Strong Earnest Money Deposit
When you write an offer on a home you most likely will be required to make an Earnest Money Deposit. It tells the seller you are a committed buyer.
The Earnest Money check is deposited in Escrow and is still your money. It can be used to pay your closing costs on the home or can go towards your down payment funds.
The higher the Earnest Money Deposit, the stronger your offer can appear to the seller and the seller’s broker.
Following these three key steps could give you a competitive for the home you desire in a Seller’s Market.
Good luck in your home search!
Cyndi Nelson, ABR, CRS, SRES, GREEN has been a Realtor® for more than 21 years and is with The Cyndi Nelson Team at MVP Realty Group. She is also a member of the Senior Action Network. Cyndi can be reached at (360)701-4223