Buying a home in a seller’s market can be extremely challenging. The prices are high, inventory is low, and there are multiple offers, often for over asking price, for nearly every home that sells.
Whether you’re a long-term investor or a first-time home buyer, the complications are the same.
If you’re looking to purchase a home in the near future you need to be prepared well in advance.
Here are a few tips on how to buy a home in a seller’s market:
Pre-Approval
Pre-approval is a must-have when purchasing a home in a seller’s market.
With pre-approval you will be aware of what you can afford and it will allow you to make offers accordingly to stay within your budget.
Additionally, many sellers reject offers that don’t include pre-approval. They see this as a risk that the deal may fall through and they would prefer to have a confirmed sale.
Bidding Wars
The majority of homes will receive numerous offers which, in turn, gives the sellers the negotiating power. You want to be prepared with your counteroffer to ensure you don’t miss your opportunity.
Searching for homes below your max budget will ensure you have room to increase your offer and give you more opportunities to get the home of your dreams in the case of a bidding war.
Make Strong Offers from the start
Unfortunately, for buyers, the days of low-ball offers are long behind us.
Make a strong from the start and remember, unconditional offers are a seller’s preference. If you’re able to make a strong offer with no conditions, your chances will increase substantially.
Write an letter
A handwritten letter submitted with your offer may not win you your dream home. However, if it comes down to 2 or 3 offers that are close in price, this may be what pushes your offer to the top.
Let the seller know what it is about the home you like so much and how you envision you and your family making memories here for years to come.
These handwritten letters are particularly helpful for first time buyers. Let the seller know of the struggles you’ve faced in your attempts to buy a home in such a hot market and why you’ve fallen in love with their home.
While all sellers do want the best price for their home, not all of them are so focused on the almighty dollar. Many sellers want to know the home is going to be taken care of and enjoyed by the new owners.
A letter doesn’t guarantee anything, but it definitely doesn’t hurt your offer!
If you’re planning to completely renovate and ‘flip’ the home, a letter is highly discouraged. This can be extremely off-putting to sellers as this is their home where they’ve created countless memories and will always be special to them.
Expand Your Search Area
Expanding your search will give you access to different styles of homes, neighbourhoods, and opportunities.
If you’ve been looking for a detached home, but everything in your area is receiving dozens of offers, maybe a large townhouse is something you’d be open to considering.
Another example is if you’ve been looking for homes within the Town of Lake Cowichan but you’re not finding the space you need, or perfect home, consider looking in various communities around the lake such as Honeymoon Bay, Mesachie Lake, Youbou, Skutz Falls, etc.
Your dream home may be just an extra 10-minute drive away!
Work with a Trusted Real Estate Agent
A trusted agent can help you in countless situations and come with the experience, knowledge, and know-how to handle a Seller’s Market and can advise you accordingly when it’s time to back away from a home or to increase your offer.
Working with an agent you trust also means you won’t be touring homes that aren’t in your budget or to your liking. They may also be able to present properties to you that are not yet listed or new neighborhoods that are in the planning stages and not publicly marketed.
Last but certainly not least, don’t get discouraged. We understand how frustrating it can be to search for homes in a seller’s market so it’s extremely important that you try to remain positive and trust that your ideal home will be listed soon!