Buying a Home in a Seller’s Market: A Quick Guide

Buyers in a Seller Market In many areas of the United States, the real estate market for homes might be one where the market favors home sellers over home buyers. Generally, this is good news for sellers as home prices in many areas have been depressed for several years. However, this type of market does raise some interesting questions for home buyers who might be used to bargain-priced homes.

The home buying advice below may assist today’s buyers meet their real estate goals as they enter a high-demand market that may favor home sellers.

What Is a Home Seller’s Market?

It is important to identify what type of real estate market you are looking at before proceeding. A home seller’s market is a real estate market in which there are more home buyers than than there are homes on the market. In this situation, some homes for sale may have multiple buyers who might be interested and then subsequently make offers on the property.

Additionally, a home seller’s market can be encouraged when mortgage interest rates are low – which encourages a larger number of home buyers into an existing market. When there are more home buyers are in the real estate market then there are homes available to meet demand, home sellers usually are at the advantage as they can ask and often receive a higher price for their home. 

Should You Purchase a Home in a Seller’s Market?

If home sellers have the advantage, should a home buyer enter the market?  The answer depends on the home buyer’s needs. If a homebuyer needs to purchase a home due to current life circumstances, such as a new job, career change or change in family status or size, then buying a home in that area may still make sense.

If an area is being looked at for reasons other than necessity, the answer becomes much more complicated. Luckily, with the assistance of a qualified real estate agent that represents you and your interests, most home buyers will still be able to find and then buy a home that fits their needs and wants.

Negotiating

Home buyers shopping in a home seller’s market might need to modify their negotiating tactics a bit. Unlike a home buyer’s real estate market, in a seller’s market, a “low-ball offer” may not work. Seller’s markets rarely have bargain-priced homes unless they are fixer-uppers and/or are in unusual circumstances.

Since buyers in a home seller’s market may have additional buyers looking and possibly placing offers on the same property, home buyers should be prepared to offer the full asking price, and potentially even more, for the right home. Here again, a real estate agent that is experienced in a seller’s market can greatly assist the home buyer in structuring an offer to a seller that will be noticed and hopefully accepted. 

Also, a home mortgage pre-approval is an important first-step in negotiating in a seller’s market. In a multiple offer situation, many home sellers may choose only from those offers where the buyer has been pre-approved for a mortgage. Additionally, home buyers that are pre-approved for a mortgage are not only aware of how much they can afford, but can move quickly to make an offer when the right home crosses their path.

Timing is Important

In a home seller’s market, the proverbial early bird will likely get the worm, or home, first. Being quick on your feet in a seller’s market is essential; from getting approved for a mortgage to being able to view a home and then make an offer as soon as possible. It is not uncommon for a home to receive multiple offers in the first day it is on the market if the market is particularly hot. 

Being Patient

Lastly, in a home seller’s market, home buyers should be willing to be patient. A homebuyer may not be able to get the first home they fall in love with, as there might be multiple offers. However, if a buyer is patient, and uses the services of a quantified real estate agent, then it is very possible a home will come along to buy that meets all or most of the homebuyer’s needs and wishes – even in a seller’s market.

Buying a home in a seller’s market can be daunting. Homebuyers need to be aware of current real estate market trends so that, with the help of their agent, they can meet all the challenges that come with the purchase of their new home. 

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