A seller’s market is when the inventory of homes in an area is low but demand from buyers is high. A seller’s market puts home sellers at an advantage. They have more leverage when it comes to negotiations because there are more buyers competing against one another.
Buying a home in a seller’s market can be challenging, especially if you’re on a strict budget. Here are tips to successfully buying a home in a seller’s market:
- Add an escalation clause – Even if you make a strong initial bid, consider adding an escalation clause for 2-3% if it’s within your budget. Doing so will allow you to automatically bump your offer up if the seller has another bid higher than yours.
- Appeal directly to the seller – Send the seller a letter explaining who you are and why you want to buy the house. If the seller has an emotional connection with you, your bid may become a priority even if it’s not the highest.
- Provide flexible terms – If you can’t compete with your offer, consider non-price factors. For example, offer a flexible closing date that appeals to the seller’s needs. You can also waive certain contingencies.
- Submit a strong offer – You may be tempted to start low, but this strategy seldom works in a seller’s market. A low bid may be ignored. Odds are the seller will have another bid lined up anyway, which means you’ll lose out to a competing buyer almost immediately. You’ll rarely have the chance to counter since many sellers will have more than one offer to choose from in a seller’s market.
Keep these tips in mind if you’re buying a home in a seller’s market. For more professional real estate advice, be sure to speak with a local real estate agent at Randy Lindsay today.
When buying a home, it’s important that you do a professional home inspection prior to closing. This provides you a chance to find any problems that the seller has to take care of (whether via a credit or by doing the repairs) — although you can usually back out of a deal as well. However, even after all of the repairs have been made (or if no issues are found), you’ll still want to do a final walk-through right before the scheduled closing date. Doing so allows you to do one last check before you sign on the dotted line. The following are a few tips for doing a final walkthrough:
- Check previous issues – If you found any problems during your home inspection that the seller agreed to repair, then make sure that those problems have been fixed.
- Check garage opener – If the house comes with a garage, make sure that the door and the remote work properly.
- Inspect all the lights and outlets – Go through the home and check every light. Plug your phone into each outlet to make sure it works as well.
- Test all of the appliances and fixtures – Make sure all of the home’s appliances and fixtures (such as faucets) are still in working order.
- Make sure everything is cleared out – At this point, the seller (or whoever was living in the house) should have moved out completely. Make sure no personal belongings or garbage was left behind.
- Look for damage – Even if you didn’t uncover any damage during the home inspection, new damage may have occurred since then. Look for leaks, mold, water damage, and general damage to the home.
Always do a final walkthrough before you close on a home. For more tips on buying a home, be sure to contact us at Randy Lindsay today.
Believe it or not, but there has actually been a surge in demand among homebuyers despite the pandemic. This is in part due to the low interest rates on mortgages and the desire for stability from a lot of renters turned first-time homebuyers. Unfortunately, many would-be sellers are less likely to sell during the pandemic due to the desire for stability. As such, there’s a limited supply available and a lot of competition, creating a seller’s market. With that in mind, the following are four tips for buying a home in 2021:
- Secure a mortgage pre-approval – Getting a mortgage pre-approval will give you a much clearer idea of what you can afford, thereby ensuring you don’t waste time looking at homes you can’t afford. A pre-approval letter can go a long way towards getting your offer accepted as well, especially if you’re competing against buyers without one.
- Calculate your budget and stick to it – Sit down and determine what your budget is. The size of the loan you can secure may not be what you can actually afford to pay, so keep monthly payments in mind. If you get caught in a bidding war with other buyers, do not go over your budget.
- Understand all of the costs of homeownership – First-time homebuyers often make the mistake of thinking they can afford a property they actually can’t, simply because they didn’t understand the total costs. Keep in mind things like utility costs, property taxes, and homeowner’s insurance.
- Work with a real estate agent – A real estate agent will not only provide helpful advice, but they can also help you find the types of houses you’re looking for and negotiate on your behalf.
Buying a home in 2021 can be challenging due to the limited supply and growing competition. These tips can help you on your homebuying journey. For more professional home buying advice, be sure to contact us at Randy Lindsay today.
One of the most important steps of the home buying process is the professional home inspection. As a buyer, you’ll want to make sure that you’re not purchasing “damaged goods.” A home inspection will reveal any issues that the seller maybe wasn’t aware of (or that only recently occurred). If you’re buying a home and the inspection reveals some issues, then you have three options: you can back out of the deal, you can request repairs, or you can ask for a seller credit.
Asking For Repairs
If there are problems that require repair or replacement (for instance, there’s a leak in the roof), then you can simply ask the seller to take care of it before the purchase goes through. Many sellers are willing to pay for repairs, especially ones that aren’t too costly, to help the sale go through.
Asking for a Seller Credit
Another option is to request a credit. Instead of doing the repairs, the seller would provide a credit that is equal to how much the repair would cost. The credit can go towards the buyer’s closing costs, but it can also be combined with a higher sale price so that it becomes a part of the mortgage. If the buyer receives a credit, then they will be responsible for taking care of the repairs after buying the house.
If your inspection has revealed issues with the house you want to buy, then you’ll want to carefully consider your options. Also, keep in mind that the seller does not have to agree to do repairs or to provide a credit — although, if this is the case, then you’re legally entitled to back out of the sale. For more information about home inspections or about buying a home in general, be sure to contact us at Randy Lindsay.
Buying a house is a massive decision, especially if you’re a first-time homebuyer and you don’t really know what to expect. Should you just dive in headfirst and go house hunting the moment that you make the decision? Probably not. There are things you may need to do before you should begin looking for homes.
What to do before beginning house hunting
You’re going to want to get things in order before you begin looking for houses. You should also understand that it can take some time to find the right house. With that in mind, consider your present situation. If you’re renting and you’ve just renewed your lease, now may not the best time. Typically speaking, you should wait until there are around five months left on your lease before you even begin the process.
The reason you need so much time is that there’s a lot to do. For example, you’ll want to get a mortgage pre-approval as well as put together a budget so that you have an idea of what you can afford. There’s no point in house hunting if you’re looking at properties that are out of your price range. You’ll also want to do some basic online research on homes in areas you’re interested in. Put together a list of wants and needs.
All of this can take a month or two. Once you have all the information you need, you’ll want to contact a real estate agent to help with the house hunting process. It can take a month or two to find the right house for you. Finally, once you put in an offer, it could take a month to go through.
Buying a house requires a lot of time and effort. As such, you should give yourself a timeline of five months when going house hunting. For more home buying advice, contact us at Randy Lindsay today.
Most real estate agents will tell you summer is the peak real estate season. In fact, around half of all homes sold during the year are sold during the summer. There are many reasons for this – families have an easier time house-hunting when their kids are out of school, the weather is much nicer, and more.
Despite the reasons why most homebuyers buy new homes in the summer, you might want to consider buying a home at the end of the year. Here’s why:
- Better Moving Prices – The cost of moving can be expensive. However, moving companies often base their rates on how busy they are. As you can imagine, they’re busiest during the summer when the majority of homes are being sold. They’re much less busy in the winter, which means they’ll be more affordable.
- Less Competition – There will be fewer buyers during the winter since most people go house-hunting in the summertime. You’ll be much less likely to find yourself in a bidding war for the home you want. With fewer buyers, you also have more negotiating power with sellers.
- More Motivated Sellers – Homesellers fully understand summer is the best time of year to sell. If they have listed their house during the winter, it means that they likely need to sell, and probably as fast as possible. They could be forced to sell as a result of their financial situation or because they are relocating for work. Whatever the reason, there’s a good chance they will be more willing to negotiate.
These are just a few reasons to consider buying a home during the fall and winter seasons at the end of the year. For additional real estate advice, contact us at Randy Lindsay today.