Colorado Real Estate News

Your Guide To Surviving a Seller’s Market

Surviving a Seller's MarketFinding a home you love and that fits your wants, needs, and budget can be a monumental task even in the best conditions. But in a tight seller’s market, you will also be faced with beating out your competition. A well-priced home in good condition will move quickly and likely have multiple offers. So, if you want to end up with the home of your dreams, you need to be prepared.

Surviving a Seller’s Market

Get Your Finances in Order

Before you even begin looking for a house, the first step is to make sure you’re in a comfortable financial position to buy. You should obtain copies of your credit score several months in advance to better help understand your position. You’ll also want to shop around for mortgage financing before searching for houses. In a hot seller’s market, it’s best to come to showings armed with a preapproval letter or a “proof of funds”.

Surviving a Seller’s Market

Prepare to Be On-Call

With so many other buyers to compete with, timing will be essential. To be successful in your home search, you will need to be readily available at a moment’s notice. House hunting is not something to fit in when you can. If you are only looking when it’s convenient for you, you’re probably wasting your time. Be prepared to comb through listings regularly, go to viewings at the seller’s earliest convenience (rather than your own), and to follow up quickly if you think it’s a good fit. Not only will this be essential for timing, but can also help build a rapport with the seller.

Surviving a Seller’s Market

Come Ready with Paperwork

Simply swearing to a seller that you have enough money for a down payment or that you will have no problem getting approved for a mortgage just isn’t going to cut it in a hot market. If you truly want to be taken seriously you’ll need to show up with hard evidence in hand. Come equipped with a pre-qualified loan, an approval letter from your lender, and a “proof of funds” from your bank. Actions speak louder than words, and showing up prepared will let any seller know that you mean business.

Surviving a Seller’s Market

Start with Your Best Offer

In a strong seller’s market, you are likely in competition with other buyers who want the house just as much as you do. So, if you know you’ve found the property you want, don’t wait to make an offer. A competitive offer comes with the least amount of contingencies. And you should be prepared to make an offer at asking price or above to really stand a chance. Also consider what the seller’s needs are. Are they looking to close quickly or at a later date? Are they looking for the best price or simply the lowest risk?

Surviving a Seller’s Market

Make a Connection

It’s true that some sellers are only concerned with how much money they can get for their home. But you will find that many others want to see their home to go to someone that will love it as much as they did. In these situations, it’s important to make an impression. Include a personal letter about why you think this home is the right fit for you. Give them a backstory about you and maybe even include a photo. This might not be the best approach for everyone, but it has worked for many people in the past and it might just work for you too!

Surviving a Seller’s Market

Make a Back-Up Offer

Many prospective buyers don’t want to make an offer on a home that already has a pending contract. But deals frequently fall apart over finances, inspections, and other contract terms. If you believe you have found the perfect house but it’s already under contract, make a backup offer. It couldn’t hurt. If the current deal falls through or the buyer walks away, you will be in first place for your dream home.

Surviving a Seller’s Market

Colorado Real Estate News

How to Survive a Seller’s Market

How to Survive a Seller’s Market

In a robust real estate market, the seller usually holds the winning hand because there just aren’t enough homes on the market.  In a seller’s market, sellers usually get multiple offers and can often get bids that are over the listed price.  House hunting is challenging enough at any time, but shopping in a seller’s market is a whole additional difficulty level.

The supply of homes is low across the country and demand is high. So with lots of competition out there how do you survive the house-hunting and hopefully land that home you’re after?  While there are no guaranteed ways to succeed, here are a few tips to help increase your chances of getting a home you truly want at a reasonable price.

Work With a Real Estate Professional

There’s a myth among some novice home-buyers that it’s only the sellers who need a real estate professional, which couldn’t be further from the truth.  Having someone who knows the local market well, is experienced with evaluating homes, knows how to successfully negotiate, and who will be your advocate through the entire process is absolutely critical.

How to Survive a Seller’s Market

Know the Signs

If the majority of houses have been sitting on the market for more than six months, it’s not a seller’s market.  If it’s only those ultra-luxurious properties which have been on the market for over a few months, that indicates that houses are getting snatched up quickly.

How to Survive a Seller’s Market

Get Pre-qualified For a Mortgage 

Getting prequalified lets you know how much home you can afford and it also shows sellers that you’re a serious buyer who is much more likely to be able to close escrow.

How to Survive a Seller’s Market

 Do Your Research 

Although your real estate agent will provide lots of help in your home search, it’s important to do a little homework on your own up front.  It will help the home-buying process if you know which areas you’d like to live in, what you can afford, and the type and size of the home you would prefer.

How to Survive a Seller’s Market

Commit to Being On Call 

To succeed in a seller’s market, you have to make house hunting a priority and always be available.  Treat house hunting as you would job hunting.

How to Survive a Seller’s Market

Be Prepared to Compromise 

Everyone wants that big, gorgeous home in the best neighborhood, but you may have to compromise a bit, especially when the market is competitive.  This doesn’t mean settling for a home you dislike; it just means going after homes with the features that you really need, rather than what you simply want.

How to Survive a Seller’s Market

Waive the What-Ifs

Typically, when home buyers make an offer, they do so only with contingencies.  For example, they would buy a home if the inspection goes well or if they can secure financing.  However, in a seller’s market, it may behoove you to drop one or two of these caveats to stand out to sellers, who generally would prefer very few hurdles on the way to closing.

How to Survive a Seller’s Market

Make a Strong Offer

Work with your real estate professional to put together a strong offer for the home you’re after.  You may also want to work with the seller on a closing date and contingencies.

How to Survive a Seller’s Market

Don’t Play Hardball

In your typical home-selling scenario, buyers make an offer below the seller’s asking price, then negotiate upward from there.  But in a seller’s market, there is often little or no room for price negotiations.  It’s almost always a waste of time low-balling a seller.

How to Survive a Seller’s Market

Connect With the Seller

If two offers are close, it may help your chances to try to personally connect with the seller or by write a letter detailing how much you love their home and how much you dream about living there.

How to Survive a Seller’s Market

Widen Your Search

In a seller’s market, it’s not unusual to feel out-priced in your favorite neighborhood, but that may merely mean you need to start scouting farther afield, such as visiting an up-and-coming neighborhood nearby.