Tips for Buying in a Seller’s Market

How to Buy a House: The 5 New Rules That Can Make or Break Your Offer

 | Apr 26, 2017
 

Rule No. 2: Secure financing before you start shopping

Gone are the days when you’d waltz into home showings without securing your financing first. If you need a mortgage to buy a home, you’ll want to get pre-approved for a home loan before you set foot in a home.

The reason: Without a lender’s pre-approval letter in hand, buyers will have a hard time getting sellers to take them seriously. Your offer, though sincere, could easily fall through for lack of funds. We told you it’s a competitive market, right?

Rule No. 3: Don’t lowball your offer

Bargain hunters, beware: If you’re making an offer on a home that’s priced to sell—meaning it’s listed at, or slightly above, fair market value—“you should present your best offer right out of the gate,” says Peggy Yee, supervising broker at Frankly Realtors in Vienna, VA.

In other words, you need to wrap your head around the idea that you’re more than likely going to be offering full list price. Although that can be tough for bargain hunters, “it’s the reality of many markets,” says Yee.

All that said, real estate markets vary by area, so look to your agent for advice on how much to offer.

How long a house has been on the market can make a difference, too. If a home has been listed for more than 30 days, that might mean it’s overpriced—and that means you might have a little room to negotiate on price.

Rule No. 4: Curb the contingencies

When buyers make an offer, they can tack on contingencies—terms that must be satisfied before a deal goes through. For instance, you might require that the place pass a home inspection to ensure that it doesn’t need tons of repairs.

All in all, contingencies protect buyers, but sellers don’t always like them because they insert many “what ifs” into the deal, which might mean it falls through.

Rule No. 5: Move fast

There’s no time to waste. In many cases, “a seller will list their house on a Friday, do a couple open houses over the weekend, and then review all offers on Monday,” says Yee. That could mean you have just a few days during which to view the property, confer with your agent, and submit an offer.

Given the time crunch, Lejeune says he asks buyers a simple question during his initial consultation. “I’ll ask, ‘If I show you the perfect house today, at a price that you can afford, are you ready to make a full-price offer right now?’ That question gives me a good barometer of how ready you are to buy a home.”

So if you’re serious about buying a house, you need to be ready to pounce.