Buying In a Seller's Market: Tips for Success
Buying an Okotoks home in a seller's market can be a big challenge. If you're new to the home buying process, or if you're unfamiliar with seller's market conditions, get prepared for an intense process. These tips can help you purchase a home for a fair price.
Understand the Seller's Market
Before getting started with the home buying process in a seller's market, you should first understand what a seller's market looks like. A seller's market is a condition wherein home inventories are low, buyers are plentiful, and many buyers have adequate financial resources to make a good offer.
In a seller's market, home prices are often very high, and sellers have their pick of many buyers. People who are not in a good financial position may be shut out of the buying process.
Get Ready to Make a Good Offer
Buyers must compete fiercely against one another to make a standout offer and get the house they want. Buyers who are unprepared to make a competitive offer are unlikely to get a house in their price range. Those who want to make a competitive offer can do the following:
- Get pre-approved. The pre-approval process is much more rigorous than the pre-qualification process, and buyers who are pre-approved are more likely to be taken seriously by sellers.
- Save to make a large down payment and earnest money deposit. Sellers respond favorably to buyers who prove they are serious by putting down a large down payment and earnest money deposit.
- Offer the asking price. Sellers are unlikely to come down for a buyer with a low offer, so buyers are encouraged to make an offer at or above the asking price.
Stick to Your Price Range
Buyers are likely to find themselves in a bidding war when they make an offer on a home. If this happens, the buyer must have some financial flexibility to make a larger offer. If the buyer is already trying to purchase a home they can barely afford, then the buyer is likely to be outbid at every opportunity. The best way to avoid this problem is for the buyer to make an offer for a home they can afford.
Make the First Offer
Sellers often get excited by the first offer, and some sellers will accept the first offer without waiting for more. This means that buyers can gain a competitive edge over other buyers by putting in the first offer on a home. Buyers who want to get their offer in first must be prepared to see a home as soon as it hits the listing. Checking the listings daily and maintaining a flexible schedule is important.
Write an Offer Letter
Many sellers like to think that their home will go to someone who will love and appreciate it. To appeal to these feelings, some buyers will write a letter to supplement their offer. In the offer letter, the buyer will describe themselves, their household, what they like about the house, and why they hope to purchase it. This is a good way to make their offer stand out over others.
Don't Plan to Negotiate Down
Sellers are usually unwilling to negotiate down in a seller's market. Buyers who need sellers to come down on their purchase price should look in a lower price range instead. Negotiating with sellers in a seller's market is often a waste of time and can lead to a lot of frustration for the buyer.
Work With a Real Estate Professional
If you're a home buyer who would like to purchase a home in a seller's market, work with an experienced real estate professional to get a house you want. Your real estate professional can help you identify homes that you can afford, and can also help you craft an offer that a seller will find attractive. Contact a reputable real estate agent to get started today.