The real estate market today is busier than ever and home buying in a competitive market has its challenges. As a result of limited inventory, sellers are often presented with multiple offers over asking price. Consequently, the competition for a single home can leave buyers feeling frustrated and often times rushed into making big decisions including pushing their budget comfort level. A home purchase is a huge financial commitment, therefore the decision to buy should never be made in haste. Patience, a well planned approach, and a keen eye are key to home buying success in a sellers market. So, here are some tips on how to buy a home in a sellers market.
In a sellers market, obtaining loan pre-approval is an essential first step. A pre-approval sends a message to the seller that the buyer is well qualified and a serious buyer. A loan officer can help guide the buyer through the details of the loan process, educate them on down payments, and if needed advise on credit repair. Most importantly, the first step in a crazy real estate market is setting up a meeting with a trusted mortgage broker.
Find the perfect real estate agent
Just like finding the right home, finding the right real estate agent will make the home buying experience less stressful. As a result, working with an experienced agent who has a good sense of current market trends and the ability to educate the buyer through the process is key. Having an agent who is a savvy negotiator doesn’t hurt either.
The home search
Getting pre-approved, finding a trusted real estate agent, and the examination of long and short term goals are the first steps in the home buying process. Therefore, once these things are in place, it’s time to have some fun and search for a home! Current market conditions coupled with low inventory and historically low interests rates means multiple buyers are competing for the same home. As a result of increased competition, it is not uncommon for buyers to waive inspection or for the buyer to order a pre-inspection. Knowing as much as possible about a home will make the purchase less risky. Here are some helpful tips (not a complete list) on things to look for when viewing a home.
What to look for in a home
- From the street, visually inspect the roof. Does it appear clean and in good repair? Find out how old it is and if there is a warranty. Replacing a roof can be quite costly. If it is on the older side a roof is something a buyer should budget for.
- Inspect the electrical panel. Although, many homes may have cosmetic updates it is still important to know if the home’s electrical system has been updated. Some older homes may have something called Knob and Tube wiring while not unsafe it might need to be updated for insurance purposes.
- Look for misaligned doors, sloping floors and cracks in the dry wall. These things might signal foundation issues.
- Is the home clean and tidy? A messy home might indicate that care has not been maintained in other parts of the home.
- Check the age and condition HVAC system. An older system might need to be replaced soon especially if not maintained.
- Check for leaks around windows and walls.
- Examine the siding. Is it in good repair with no noticeable soft spots or decay?
- Check the drainage. Does the water disperse away from the home?
For more info on home inspections visit:
How to buy a home in a a sellers market
Issues found through quick visual inspections by buyers however, should not replace an inspection by a qualified home inspector. In addition, it should also not dissuade a buyer from making an offer on a home. Many variables factor into choosing the right home and each buyer has unique needs. Location, size, floor plan, style and price are a few. Is it move in ready? Does it need updating? Does it meet current and long term goals? In conclusion, buying a home in a competitive market doesn’t have to be trying. But, with the right team in place to assist and a little diligence, a multiple offer situation can turn into a winning offer for a happy buyer.
Check out our buyer book for more information about the buying process:
Written by Rondie Martin
Realtor® ABR® e-PRO SRES®
Windermere Senior Transition Specialist