A seller’s market is when demand exceeds supply. This means that just like any other product, the real estate market is influenced by the supply and demand forces. You may have an eye on a particular property but because the area has a high demand rate, the bidding war is also intense. This brings the question, is it worth it to buy in a seller’s market? You should never back out from purchasing a property in a seller’s market. What you want is to be prepared. In this article, we are going to share strategies that will help you to successfully navigate buying in a seller’s market.
What Are The Signs Of A Seller’s Market?
Some of the signs that you are buying into a seller’s market include:
- Fewer properties on sale in an area
- Listed properties selling faster
- Properties selling on a higher amount than the listed prices
- Fewer or nonexistent incentives from sellers
Be Prepared To Pay More
Buying in a seller’s market is hectic, especially during the spring and summer seasons. According to Forbes, due to the COVID-19 pandemic, buyers are now lining up to buy houses for months unlike during the pre-pandemic spring and summer buying surge. The market is already busy and the interest rates are going up. So, you should not be surprised when asked to pay more than the asking price.
Make An All Cash Offer
The majority of sellers are willing to accept a cash offer rather than taking the risk of a mortgage and not getting funded. As a buyer, when you make an all-cash offer, you have much more negotiating power. Sellers want to close faster. By offering a cash offer, you help them save the time and money needed to close a deal.
Find The Best Properties For Investment
When looking for an investment property, ensure you look in a neighborhood that will offer a high return on investment. The location of the property will also determine the occupancy rate, the rental income and the type of renters you get. Working with an experienced realtor to help you locate such properties will save you more time since he has all the information regarding the listed properties.
Consider Renting Before Buying
Knowing whether a home is right for you takes time. In a seller’s market, there is pressure to close a deal quickly because the competition is high. If you like a house but not so sure if that is what you want, you can consider renting it first. You not only buy time, but you also get a better feel of the property and the neighborhood before you make the final decision. During your stay, you may find that there are better houses with better offers than your original choice.
Expand Your Search
Neighborhoods with the highest demand always sell at higher prices. Before making the final decision, go a little further from popular neighborhoods to expand your search. You can find properties with better amenities and more square footage for less money. People often rush to buy properties in a “busy” area and often overlook beautiful neighborhoods with better amenities.
