Buying in a Seller’s Market – The 2021 Guide for Home Buying
The COVID-19 pandemic ruined many things around the world. But there’s one thing that improved — mortgage interest rates. Right now, interest rates are at historic lows and people are finding
it easier than ever to qualify for a mortgage. However, with so many buyers flooding the market, more people are trying to buy than there are houses available which leads to a seller’s market.
This creates what is known as a seller’s market, meaning sellers have more bargaining power when it comes to selling their homes. Let’s unpack the seller’s market of 2021.
- Seller’s market = Demand exceeds supply
- Be ready — Remove barriers to your move
- Get approved and make strong offers
- Work with an aggressive, professional realtor
Here are our 10 tips for buying in the 2021 seller’s market.
10 Tips for Buying in a Seller’s Market
Be ready to move quicklySpeed and clarity are powerful tools in this situation. You need to be more flexible than the other buyers who are out looking. This is about having the right mindset as well as having your financial ducks in
a row. If you find a home that you love, be prepared to put in an offer immediately.
Know what you wantIt is critical that you have a clear and defined list of your housing needs before beginning the active search for a property. In the current housing market, homes can have multiple offers within hours of being listed.
If you know what you want in your future home, you can put in an offer more quickly.
Why do you want it?Understanding the true motivation behind your housing needs will assist you in finding alternatives and thinking strategically when it comes time to make an offer.
Get approved for financingThe last thing you want is to lose out on the home of your dreams because you did not have financing set up and the seller went with another offer while you scrambled at the last minute. Regardless
of whether you’re purchasing a home in a buyer’s or seller’s market, we recommend always having your financing in order before you even start to look at homes.
Shop in your price rangeDon’t look at a property with the assumption that you can “talk the seller down” on their price. In a seller’s market, that won’t happen. Look for homes in the price range you qualified for — another
plug for getting pre-approved financing! You can also shop for less than what you qualified for, to secure smaller monthly payments.
Make strong offers with few contingenciesYou can “clean up” an offer and put yourself ahead of the competition by removing barriers for the seller and reducing fear from the transaction. If two prospective buyers come in with the same
price offer but one has purchase conditions in the contract, sellers are more likely to choose the offer with no contingencies. That isn’t to say you can’t ask for certain conditions, but the fewer you have, the more enticing your offer will be
to the seller.
Use an escalation clauseDon’t know what that is? Hint — this clause may help you come out on top in the event of a bidding war. We highly recommend prospective buyers add this clause to their purchase offer.
Focus on the long termSometimes it can be frustrating to buy in a market that you do not control. It is easy to let fear take over and start wondering if you are buying into a bubble or making a bad decision. As with any housing
move, it is all about the long-term perspective. If you are buying the home for the right reasons, the home satisfies all your needs, and it is in your price range, then you are set up for success.
Write a letter to the seller who is receiving your offerThis is one of those very simple “tricks of the trade” that goes a long way. A personal letter to the seller, along with your strong offer, makes a compelling and personal case for why
their home is perfect for you. Sellers are people, too, and it is surprising how much they can be swayed by a genuine personal touch. In a seller’s market, many prospective buyers may write letters as well, so make sure there is enough
personality in your letter to possibly sway the seller.
Work with an aggressive and professional realtorThe right real estate advisor can set you up for success with knowledge of homes that have yet to hit the market, assisting you with making rapid decisions, structuring an offer so that it is
likely to be accepted, and giving you priceless counsel in what can be (but doesn’t have to be) a stressful process. With so many buyers looking for homes in the current seller’s market, your realtor can help you make aggressive moves to land
the home of your dream