How To Gain A Competitive Edge In A Sellers Market
4 Jun 2016

Shopping for your new home during a sellers market can be challenging. Homebuyers today are facing additional pressure as the supply of homes remains low and demand is high. Here several tips to help you gain an edge and maintain your sanity while searching for your new home.

Commit to being on call
To succeed in a seller’s market, you have to make house hunting a priority. Treat house hunting as if you were job hunting: Search listings regularly, schedule showings as soon as possible, and follow up promptly if you feel it is a fit.

Come bearing paperwork rather than promises
The way to be taken seriously is to show up with hard evidence in hand. Make sure you obtain your mortgage pre-approval letter, plus a “proof of funds” form from your bank showing you have enough to cover the down payment. That way the seller knows you can put your money where your mouth is.

Waive contingencies
Typically, when home buyers make an offer, they do so only with contingencies. For instance, they will buy the home if the inspection goes well or if they can secure financing. But in a seller’s market, it may behoove you to drop one or two of these caveats to stand out to sellers, who generally would prefer as few hurdles on the way to closing as possible.

Don’t play hardball
In your typical home-selling scenario, buyers make an offer below the seller’s asking price, then negotiate upward from there. But in a seller’s market, often there is little to no room for price negotiations, In fact, if there are multiple offers, you could end up paying over asking.

Don’t waste your time low balling a seller.
If you feel the house is a fit put in an aggressive offer. At the same time, you don’t want to blow your budget. You still need to make those monthly mortgage payments. Bid strong, but don’t overextend yourself financially.

Widen your search
In seller’s markets, it is not unusual to feel out priced in your favorite neighborhood, but that may merely mean you need to start scouting farther afield—like in an up-and-coming neighborhood nearby.

Sometimes properties sit, even in a seller’s market, because of a problem that is scaring other buyers away. Yet those “flaws” (e.g., an extra five minute drive from school or some renovation work that needs to be done) might not be such a big deal to you. While such houses may not be ideal for all, finding a house this way can also cut down on the amount of competition you will face. That means you hold a few more cards—a welcome change in a seller’s market.

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