As a buyer, finding yourself ready to buy a home in a seller’s market isn’t always a great place to be. Sellers can demand higher prices for homes and sometimes receive dozens of offers from buyers with deep pockets who waive contingencies just so they win the bidding war on the home.
Do you want to buy a home this year and want to be competitive in this sellers market? Continue reading for our top tips on how to be a buyer that gets their offer accepted in a seller’s market.
Understanding the market
Regardless of whether it’s a buyer or sellers market, it’s important to understand the market and current economic conditions, including factors that affect interest rates and cause home values to fluctuate.
When interest rates are high, borrowers can’t borrow as much from lenders and lenders can’t issue as much money to borrowers for their mortgages. This means that buyers should know their budget before starting to look for homes in their target market.
It’s also important to understand the changing economic cycles and how they affect real estate values. In times of recessions, real estate values tend to go down due to job loss and instability during these tough times.
However, real estate values don’t always follow this standard trajectory. Factors like location, severity of the recession, and market conditions can impact the real estate market in unpredictable ways.
Hiring a real estate agent
Hiring a real estate agent is a great idea, especially for first time homebuyers. Without a trusted real estate agent on your side, it will be hard to navigate the real estate process when buying a home for the first time.
The best way to find a real estate agent is through word of mouth. More than likely, you know a friend or family member who has gone through the home buying process and may be able to recommend a real estate agent in your area.
What to look for in a real estate agent
Real estate agents are everywhere. While it’s not too hard to find an agent, the problem is finding a good agent who will help you get the house you’re looking for at the right price.
Good real estate agents are not only experts in your local area, they also have connections with other agents who can potentially assist in getting your offer accepted over others.
Getting a pre-approval letter
A pre-approval letter is a letter from a mortgage lender that pre-qualifies you to give you the confidence that you’ll be approved for a mortgage. The pre-approval letter also gives you an idea of the interest rate you’ll be approved for when it’s time to formally apply for the mortgage.
Pre-approval letters are crucial in helping you determine how much you can afford when making an offer on a home. If a lender approves you for a $400,000 home, you’ll know that it’s not realistic to shop for homes at higher price points.
The bottom line
Entering the real estate market as a buyer in a sellers market isn’t always a good idea. However, with the right real estate agent on your team, you’ll be able to navigate the real estate market and find a home that’s right for you.