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Navigating a Seller's Real Estate Market
When you want to buy a house, you hope for a buyer’s market – one with lots of inventory so that sellers have to price their homes competitively. But what if it is a seller’s market? The real estate website Trulia has some suggestions for navigating a seller’s market:
Start with a good offer. In a market in which homes are moving quickly, sellers have little motivation to take significantly less than asking price. So look at what comparable properties have sold for recently, and base your offer on that. In a seller’s market, you cannot expect to start well below asking price and enter a prolonged negotiation.
Don’t wait. Of course you want to think about whether you really want to buy a particular home. But don’t wait too long, because in a strong seller’s market, it is very possible that someone else will have snapped up the house by the time you decide you want it.
Work with an experienced professional. This is especially important during a seller’s market. First, your agent can help you decide where you should be with your opening offer. Also, a good agent has insight not only into specific homes, but into the market as a whole in your area. For example, your agent might be able to let you know about a house that is just coming on the market, so that you can get a jump on your competition.
Get your financial ducks in a row. At the very least, you should be pre-qualified for a mortgage. It is even better to be pre-approved, in which you already have applied for and been approved for a mortgage. This shows the seller that you can get the financing you need to buy their house, and that they are not wasting their time – and maybe missing other opportunities – by negotiating with you.
Be prepared for a bidding war. In a seller’s market, it is not unusual to see two or more potential buyers get involved in bidding against one another for a specific house. Before you start your home search, decide on your maximum budget. That way you will be less likely to exceed it if you do get into a bidding war.
Learn from your mistakes. If you have an offer – or maybe several offers – declined, determine where you went wrong. Maybe your first offer was too low or you did not act fast enough or you did not have the financing. Understanding why you did not get a house can help you be successful when you make an offer on another one.