A Buyer in a Seller’s Market!
Are you scanning Zillow or Trulia every day looking for your new home? Do you spend Sunday afternoons shuttling between open houses? If this is you, I suggest you determine what type of housing market you’re working in — a buyer’s or seller’s market.
A buyer’s market is a great place to exist for buyers. The definition is there is simply there are more sellers than buyers. We’re talking about simply supply and demand. The supply is too great for the demand in a buyer’s market. The results of this great supply is low prices for buyers!
A seller’s market is, obviously, the opposite. There are too many buyers for the inventory of homes in the market. In Northern Virginia (DC Metro Area), this has been the market for years. The results of a seller’s market are higher prices for buyers. To determine the market where you live, refer to the days on market number. Here’s what a seller’s market looks like: a home goes on the market priced $15,000 over the comparable homes in the neighborhood on Friday, Sunday’s Open House sees thirty couples, and then by Monday night there are multiple offers.
You may be asking yourself, “how can I get the home I want at the price that I can afford?” Below are some tips to help buyer’s in a seller’s market.
- Get your pre-approval letter from your lender before you go out looking for a home. Obviously, in all markets you should be pre-qualified for a mortgage before you search for your new home, but in a seller’s market time is valuable so don’t waste time waiting on that pre-approval letter.
- Ensure your Realtor is pro-active. You need a pro-active Realtor that is searching for homes that are coming soon, talking to their fellow agents about listings coming on the market, and constantly communicating what he or she is seeing in the market is key to buyers success in a seller’s market.
- Give your Realtor a week ahead schedule. Time is valuable in a seller’s market, so let your Realtor know when you’re free to see homes the upcoming week so that he or she can schedule you to see the homes as they come on the market.
- Read and understand the offer contract even before you submit an offer. Ask your Realtor to send you what an offer looks like, read through it, and ask your questions before you put in an offer. Speed can kill a deal — don’t let it take your dream home.
- Identify and communicate your wants vs. your needs. A great home doesn’t always capture 100% of your wants and needs. If you can get 75% of what you want and need than you should buy the home. In a seller’s market the time to think and ponder isn’t there. Before you begin the home search, have the discussions with your family and/or yourself about what you want in a home and what you can live without. Most importantly, tell your Realtor what you want and what you need. If this changes, tell him or her that it’s changed.
- Ask your Realtor about his or her strategies to win homes in a seller’s market. Every Realtor should have strategies and tactics to help secure your desired home in any market. Communication between agents and clients is key in all transactions, but when time is against you it’s even more important. It’s imperative that you feel comfortable with your Realtor especially when the clock is ticking.
The key take away for buyers to understand in a seller’s market is that speed kills deals. You must be prepared to make an offer the day you see a home that you want to purchase. Additionally, communication between you and your Realtor is a must to navigate the choppy waters of a seller’s market. As an agent working in a competitive seller’s market, I urge you to begin your home buying process by finding the right Realtor for you and prepare financially for the home buying process ahead of jumping in the car to see homes.