8 Tips to Buying a Home in a Sellers' Market
Even if you're a well-qualified buyer, this is a brutal market.
Whenever you fall in love with a home, you can count on the fact that at least 10 or 12 other people will fall in love with it, too.
You may think that if you just offer a hefty premium on the listing price, you'l be home free. That's not necessarily true.
It's not easy to be the successful bidder on the home you love, but here are some ways to increase your chances:
Make sure you're receiving instant updates for all new listings.
The best ones won't linger long. If you're lucky, they'll be available for showings for just a few days before the listing agent shuts the access window. Those who wait will be locked out.
Assume that a home's list price is lower than its eventual sale price.
That's right. Since January 1, 2021, more than 60% of the properties listed for $1 million or less in a sampling of Greater Boston suburbs sold above the asking price; some of them sold for considerably more.
Focus on homes priced below your limit.
If you can afford to buy up to $500,000, search for homes priced between $450,000 to $480,000. You won't have to stretch to make the above-listing-price offer that the fierce competition will demand.
Get a strong preapproval letter.
Increasingly, this means showing that you can put down a significant amount of cash. Why is this important? Because if the home sells above the asking price--as is likely--appraisal issues could arise. For this reason, sellers may decide to select not the highest offer, but the one that has the best down payment.
Don't wait until the last minute to submit your offer.
Sellers can accept offers at any point in the process, even when an offer deadline has been advertised. They don't have to wait until that deadline has passed to make a binding decision.
Ask the sellers if they have a preferred closing date.
If they do, meet it.
Make your offer stand out.
If everyone else is making earnest money deposits of $1000, make yours a bit higher. If everyone else is asking for a 10-day inspection period, make yours only 7 days. These little nuances won't cost you more money, but they may make a big difference to an anxious seller.
For more tips, check out A Buyer's Guide to Multiple Offers.
Make your initial offer your best offer.
If the sellers receive multiple offers, they'll be looking for ways to eliminate the weakest contenders. You may not get an opportunity to submit another "best and final" bid. Take your best shot up front.