Have you ever heard the term “seller’s market” and wondered what that means? As a Burlington mortgage broker, it’s important to know whether the market is deemed a buyers or seller’s market. If you are looking for a home in a seller’s market it means that there are fewer homes on the market than people looking to buy. This gives the seller an advantage because they can ask for higher prices for their homes. So, what can do if you are looking for a home in a seller’s market? I’ll share some secrets that can help.
Always Do Your Research
Before you start looking for your own home, take a look at what the homes are selling for in the areas you are interested in. This will give you a more realistic look at price ranges. It also saves you time looking for homes in areas that are out of your price range. Our Burlington mortgage brokers can put you in touch with a realtor in specific areas to give you an idea of what you are looking at.
Be Realistic in What You Can Afford
I often see people looking at homes that are above what they can afford, whether by a large amount or a little over their range. If you have a budget or pre-approval rate of $300,000 and put a bid in on a home for $340,000, you risk putting yourself in financial difficulty. Another scenario is putting up a bid of $300,000 for a $320,000 home. You may be disappointed when your lower offer is rejected. Remember, in a seller’s market, the seller knows they can get what they are asking for or more. They aren’t going to take a lower bid.
Always Get a Pre-Approval or Pre-qualification
This goes for both a sellers’ or buyers’ market. A pre-approval or pre-qualification gives your bid a bit more weight because it shows your commitment and ability to afford the home. A seller is more likely to take a bid from someone with a pre-approval letter than someone without one. The reason for this is that they won’t have to wait for you to go through the pre-qualification and pre-approval process and risk things falling through when you don’t get approved for the amount you were after. If you already have that pre-approval it can make the sale go through quicker, which is what most sellers want.
Take Action When the Timing is Right
I’ve seen this scenario before. A buyer finds a great house that ticks all of their boxes but hesitates to jump on it because they have only seen one or two houses before it. If a home feels right, regardless of whether it’s the 3rd home you’ve viewed or the 30th, don’t be afraid to make your move. I’ve seen too people face disappointment because they didn’t take that chance and lost the house of their dreams because they waited to view other homes. In a seller’s market, homes are going to get snapped up quickly.
Keep it Simple
When making your offer, try to keep it simple and not too many conditions. Sellers see conditions as a deal that has more chance of falling apart than a straight-up offer. Even in cases where you are offering them the asking price of a bit more, they may choose to go with a bid that is a bit less because it’s straightforward. It is important to have your realtor include a condition of financing for your protection, on older houses you should also have an inspection done. On a newer home a home inspection may not be necessary. Adding conditions such as the sale of your own home lessen the chance of a seller accepting your offer, however sometimes you don’t have an option depending on your circumstances.
Buying a home in a seller’s market can feel overwhelming, but hopefully, these tips will give you that edge you need. If you have questions or want some more tips to help you out, give one of our Burlington mortgage brokers a call today!