Buying a Home in a Seller's Market

Posted by Justin Havre on Wednesday, February 27th, 2019 at 10:10am.

How to Buy a Home In A Seller's MarketWhat is a seller's market? A seller's market has too many buyers and not enough homes. Prices are high in a seller's market, forcing the buyer to scramble to obtain a deal on the home they wish to purchase. Though a seller's market is competitive, buyers who are serious about purchasing a home can adjust their strategies to ensure that they will stand out among the other buyers.

Act Fast When a Home is Listed

Good deals go fast in a seller's market. To get the best deals, home buyers must look at the listings every morning, go see homes as soon as they become available and put down offers before anyone else. In a market like this, it's important to work with a responsive real estate agent who acts quickly when there is a home that needs to be seen. It's also a good idea to use online tools to identify homes that meet the buyer's criteria. This makes it easier to find desirable homes quickly.

Get Pre-Approved for a Mortgage

Pre-approval is a process that buyers go through before looking for a home where their finances are scrutinized by a lender to determine if they can afford a home. Sellers tend to favor pre-approval over pre-qualification, so before making any offers on a home, home buyers must get into contact with lenders in order to obtain pre-approval. In order to become pre-approved, the lender will require the buyer to send in a variety of important financial documents. Doing this weeks in advance of looking for a home can help ensure that the buyer is prepared to make a purchase.

Put Down A Big Earnest Money Deposit

A big earnest money deposit is attractive to home sellers because it shows that the buyer is very serious about purchasing a property. The bigger the earnest money deposit, the more impressed the seller will be. Considering how much to offer on a home? Home buyers trying to decide how much money they can put toward the earnest money deposit must look at all of their assets and set aside money for closing costs, home repairs and relocation. Once this money has been taken into account, whatever is leftover can be used for the earnest money deposit, if that is what is desired.

Make Your Purchase Offer Competitive

In a seller's market, the homeowners are likely to get multiple offers on the home, and they'll have an opportunity to choose the one they like best. The highest bid isn't always the best offer so consider these ways to make your offer more competitive:

  • Flexible Closing. The seller may be looking for a fast close, or they may need to stay in the home for a while before closing for various reasons. If you can, be accommodating to the seller's timeline.
  • Clean Offer. Limit the number of contingencies to only those that are critical to you. Some examples include a home inspection, financing, and selling your current home.
  • Be Reasonable. Do not try to nickel-and-dime the seller during negotiations as they are likely to have other offers with fewer hassles from which to choose.

Lastly, know your limits. Don't be too eager to be overly generous with money you cannot afford to spend. If you've reached your limit, be ready to start again with a different home.

Write A Letter, Include a Picture

Many home sellers are attached to their home in sentimental ways. Those who are like to imagine that the people they sell their home to will develop similar attachments. The home purchasing process can be very anonymous, but home buyers can make the process less anonymous by writing a letter and sending a picture attached to the offer.

The letter can include any information that the home buyer would like to include, but should have a personal touch. The names of the people buying the home, what they like best about the house and what they're looking for in a new property can help the seller feel connected to the buyer. This can prompt the seller to accept the buyer's offer over others, especially if all of the offers are similar to one another.

Contact Your Real Estate Agent

A good real estate agent can help a home buyer stand out in a seller's market. If you're buying a home when competition is fierce, contact a local Airdrie real estate agent. A capable real estate professional can guide both buyers and sellers through the process and help you acquire the home that you want.

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