Buyers have to get creative in this hot sellers’ market. With inventory so low yet prices still so high, what is a buyer to do if they want to submit the winning bid? With many homes getting multiple offers, often times well over the list price with waived contingencies, many buyers are getting frustrated when their offers are repeatedly rejected.
Here are some tactics you can try when housing inventory is tight.
Determine Your Budget and Stick to It
Before you even start looking for houses, come up with a budget. Once you know what you can afford, get a pre-approval letter from a lender which will tell sellers how much you are qualified to borrow. For your budget, keep in mind all the stuff you have to pay for aside from the mortgage, such as taxes, utilities and insurance.
This will help you create a final budget you are confident you can comfortably afford. When home listings are scarce, this can lead to bidding wars that can drive up prices. You have to be prepared to walk away from a home if the price goes over your budget.
Think About Wants vs. Needs
In a market where inventory is tight, you have to be prepared to compromise on things you want in your home. You may have to forgo the stainless steel appliances, hardwood floors and three-car garage for now in order to snag an affordable home, but just remember you can always make those upgrades later.
But there are other things that can’t be changed later, such as desired school district or large backyard. Figure out your wants vs. needs and learn to compromise.
Make a Decision Quickly
Because the sellers are holding all the cards, it’s not uncommon for homes to stay on the market only for a few days. If you see a house that you like and that meets your needs and budget, don’t hesitate to put in an offer as soon as possible. If you wait, someone else will beat you to it.
Bid Competitively While Limiting Contingencies
In a buyers’ market, it’s common to offer low starting bids, but sellers’ markets are a whole new ball game. You have to put forth your highest offer from the start or you will probably lose out. However, the highest monetary offer doesn’t always win the bid. Sometimes the most attractive offer to a seller is one that has the fewest contingencies.
Be flexible with move-in dates, tell the seller your offer isn’t contingent on selling your existing home first, and waive all inspections and appraisals.
Hire a Real Estate Agent
Looking for a home is a time consuming and stressful process. You need someone on your side who can help you navigate the process, show you properties within your price range, and negotiate the best deals for you. A qualified Realtor will give you as the buyer a competitive advantage in this tight market.
Contact Berkshire Hathaway Premier Properties for Help in Buying a Home
Our experienced buyers’ agents are here for you now more than ever. Even with tight inventory, we can help you find something that fits your needs and wants. Just contact Berkshire Hathaway Premier Properties today at 713-862-0000.