It is no secret that buying a home in a seller’s market presents its own set of challenges. After all, inventory can be quite tight while prices may be higher than you were hoping to pay for your home or investment property. Fortunately, it is still possible to make a purchase in a seller’s market, but you should keep these four tips in mind in order to get the best deal possible.
Tip #1: Don’t Waste Time
In a buyer’s market, inventory tends to move quickly. Therefore, you cannot afford to waste time when trying to make a purchase in this tough market. If you have your heart set on making a purchase in a tough market, you need to start your hunt as soon as possible and put your offers in as soon as you find a property that suits your needs. Ideally, you should work with a real estate agent who knows exactly what you are looking for in a property so you can be notified as soon as a good match hits the market. Then, set up a tour of the property immediately so no time is wasted in making a decision.
Tip #2: Get Pre-Approved
As part of the process of cutting down the amount of time that is wasted, you should get yourself pre-approved for a loan as soon as you have decided you are going to make a purchase. Pre-approval is a step beyond pre-qualification, as pre-qualification is only meant to provide an estimate of how much you can receive in for a mortgage loan while pre-approval means the lender has actually committed to a loan of up to a certain amount. Not only will pre-approval help to move the process along more quickly, but it will also make your bid more attractive to sellers. As such, pre-approval can give you the edge over others who might be interested in purchasing the same property.
Tip #3: Offer a Tempting Price
When buying in a hot market, you don’t have much room for negotiation when it comes to price. In most cases, you should offer the asking price or maybe even slightly more in order to get your offer looked at more closely. Of course, you should first have your agent compile all of the relevant information about the property in order to determine a price that makes sense. You should also consider your pre-approval amount as well as how much your monthly payment will be as you determine how much to offer for the property.
Tip #4: Avoid Adding Contingencies
Real estate offers frequently include contingencies, which are things that the buyer wants to be completed by the seller before the transaction can move forward. To make your bid more attractive to sellers, it is best to avoid adding contingencies to your bid offer. This helps to reassure the seller that there is less risk of the deal failing to go through. Of course, you will also need to consider your own interest in the transaction, so you should only bypass those contingencies that you feel comfortable with dismissing.