You’ve likely heard the term, it’s a “Seller’s Market.” Well, if you are actively searching for a new home, you know that it’s true for a lot of areas and price points across the country. The low inventory of homes for sale has made things difficult for buyers. There just aren’t many homes for sale out there and when a nice listing does come to market, it’s likely met with multiple offers.....often with offer prices over asking.
If you’re a buyer in this market, you might feel overwhelmed but remember that with a solid strategy, you can still find your dream home, even when inventory is low.
The highest offer price in the world isn’t always automatically the top offer. I always remind my buyers that the best offer is composed of not only a good price but also good overall terms (settlement date, contingency timeframes - if any, price, financial strength, using a local lender, etc.)
Here are a few tips for buyers looking in a tight market:
- Talk to a local lender before you shop so you’re prepared - local lenders/mortgage companies have relationships with Agents in the area and have internal local processing, allowing for a better overall lending experience. This ensures everyone that the deal can close much easier than if it were at larger national banks.
- Be prepared to pull the trigger - sometimes there isn’t much time to think about a home, so be ready to go when you see one you like. Schedule a tour to view it as soon as possible and if you’re ready, begin talking to your lender and Agent about the numbers and options.
- Write a competitive offer - as a Buyer’s Agent, I always reach out to the listing agent to discuss the home, the seller’s needs and find out if there’s anything additional we can do to put forth our best offer (timelines, rent back, etc). Any piece of information that I can pick up can be helpful in our conversation to writing a competitive offer.
- Keep contingencies to a minimum - In Northern Virginia, the standard contingencies are home inspection, radon, appraisal and financing contingencies. A contingency is a provision in a real estate contract that can allow a contract to become void if a certain event were to occur. For example, an appraisal contingency would allow a buyer to get out of the contract if the appraisal came in low (usually this can happen around week 2 of a contract) and the buyer and seller can’t agree on a solution. Can you see now why sellers prefer fewer contingencies? Anything can happen! As a buyer, you can still be successful with contingencies but if other buyers are removing them or modifying them, it can make your offer less competitive.
- Write a clean offer; Make it easy for the sellers to just say yes - A clean offer is well written, the terms and price are clearly written and the contract isn’t all marked up. This makes it easy for everyone to understand all the terms and conditions.
- Explore off-market opportunities - there may be some off-market opportunities your agent may know about! These are listings that aren’t on the market to the public, cutting back the amount of people that are aware the sellers are willing to sell their home.
When inventory is low, it’s extremely easy to feel like the best homes are already gone, but by working with an experienced buyer’s agent, you can put yourself in the best position to have your offer accepted.