Buyers– I know that trying to buy a home in 2017 has not been easy on you. Supply of homes is extremely low, demand is high, and sellers are in control. Home buying season typically kicks into gear in March, but recent data from realtor.com shows that following a stronger than normal off-season starting last September, demand during January remained strong while low supply has kept prices high. This persistent demand is resulting in record-low levels of housing inventory.
Why the high demand? Interest rates have begun to rise and are projected to only continue climbing higher. Inventory is at a record low level. Home prices are increasing and are not predicted to fall any time soon. There’s a big increase of first-time homebuyers. Many cities (like Fort Worth) have an influx of people relocating there every day. Although this market is intense, if you don’t jump on board now, you may be too late.
As chief economist for realtor.com, Jonathan Smoke, said “It’s tough to buy a home today most places in the country because there are so few homes for sale. But if you wait to buy, then you’re gambling that the market will be better for you to purchase in the future.” And based on current real estate predictions, that’s not a smart gamble. If you have been toying with the idea of buying or anticipate a life change that may force you to move, you should be “buying as urgently and as soon as possible,” Smoke says.
So how do you win your home in such a competitive market? You better bring your A-game. If you’re not careful in this market, you’ll be left drying your eyes with the broken shards of your rejected offer. And yes, it is painful. So commit to the process or don’t bother showing up at all.
Live by these survival tips to stand out from the competition and gain an edge in this home-buying feeding frenzy:
- Commit to being on call
- To succeed, you have to make house hunting a priority. This ain’t no sometimes thing for you to fit in here and there. Your realtor will be calling you, really at all hours, to let you know if a new home has hit the market that meets your wants and needs. Don’t dilly dally– get in your car and get there.
- Come bearing paperwork, not promises
- Talk is cheap. If you don’t have all your ducks in a row with your financing, get them in a row now. Show up with a mortgage pre-approval letter to show that you are legit and that it is a real offer.
- Be a bold buyer
- Make your offer as appealing as possible for the seller. If you can waive any contingencies, do it. Shorten your option period as much as possible. Set your closing date based on what’s best for the sellers, not you. Take out all the “what-if’s” and guess-work for the sellers, and you will be ahead of the pack.
- Don’t play hardball
- I. can’t. reiterate. this. enough. I understand that in your typical home buying scenario, buyers make an offer below the seller’s asking price, then negotiate upward from there. But in a seller’s market, its a whole different ballgame. There is usually little to no room for negotiation. In fact, if there are multiple offers (as there are on so many homes right now), you could end up paying well over asking price. Don’t waste your time low balling a seller! Put in an aggressive offer that you are confident in. It’s called “highest and best” for a reason. So don’t blow your budget, but ensure that you bid strong.
- Be willing to compromise
- Do you have champaign dreams on a beer budget? Prioritize your needs and try to be flexible where you can. If you want a nicely updated home in a popular part of town, you may find the price to be far out of reach. So perhaps you can widen your search around that location or look for a home in a nearby up-and-coming neighborhood instead. If location is key, give up some of your “material” wants (granite countertops, dazzling wood floors, updated bathrooms)… These are things that can always be updated or changed in time. The best advice I can give you, is make sure that your practical and functional priorities don’t get lost to your materialistic desires.
- Keep calm and find a Realtor®
- Find an agent who you trust and like. The relationship you build with your Realtor® will make your decisions easier and your transaction successful. Rely on them to be scouring the market daily, providing you with comps, and advising you every step of the way.
Buying a home during a sellers market is not for the faint of heart. There are many factors that need to be considered in order to help decide whether it’s a good idea or not. As mentioned above, having a great Realtor® is critical when buying a during a sellers market. A top Realtor® can help a buyer decide their best plan of action and will be looking out for the buyer’s best interest, not the best interest of their pocket book!