Published April 01, 2014
There is nothing more frustrating than wanting to buy a home but being unable to through no fault of your own. In many markets across the country, there simply are more buyers than sellers and homes are moving quickly — sometimes for more than the asking price due to high demand and low inventory.
Home buying is not as easy as seeing a new listing online, going to view it in person and making an offer. In a seller’s market the gloves come off and would-be buyers need to act fast, think outside the box and be prepared to work at the home-buying process.
Don’t use conventional search methods
With limited inventory and many buyers looking for the same thing, next-generation buyers need to think outside the box. You must assume that every home out there, even those that lack “For Sale” signs, are for sale in this day and age. Work with your agent to look at pocket listings, Make Me Move listings, and expired or withdrawn listings from years past. Look at pre-market homes or “For Sale By Owner” homes that may not be listed by conventional methods like the MLS. If you like a home in your neighborhood, don’t be afraid to reach out to the owner with a personalized letter. It’s worked before.
Get pre-approved for a mortgage
The buyers who get the house in a competitive market are the buyers who are organized, well prepared and ready to move when the right home comes along. What does this mean? Know about any issues with your credit report and make sure your financial house is in order. Start by getting a pre-approval letter from a reputable lender, that you can show to agents and sellers. A pre-approval letter is typically good for 90 days and shows sellers that you are a motivated, credit-worthy buyer who is able to act fast. Faced with multiple offers, the seller won’t just consider the highest offer but, rather, the person who can close quickly and is a sure thing financially.
Work with a good local agent
Want to live in a particular neighborhood or school district? Chances are there are a handful of agents who specialize in the area. Know who they are and try to work with one of them. A good local agent means the difference between getting your offer accepted in a competitive market and spending months unsuccessfully writing offers. Good agents like to work with agents they know. A good listing agent wants to be certain, for the sake of his seller clients, that a deal will go through. One way they can provide this certainty is to steer their client toward a buyer whose agent is well-known, well respected and can get the deal done. Work with someone from outside the area or unfamiliar with local customs and your search could drag on for months.
The early bird catches the worm applies in real estate. See a home hit the market on a Tuesday morning? Go see it right away. In a strong market, buyers are aggressive and homes move quickly. It’s not uncommon for a home to have multiple offers on it before the first open house. What’s worse? You show up to the open house and the sign on the front yard says “open house canceled” because an offer has already been accepted. It’s happened before.
Trying to buy a home in a sellers’ market can almost amount to a part-time job. You need to be flexible with your schedule and be ready and able to move quickly when the right home comes your way. The right home for you can show up at any moment. Consider this: Right now the owner of your future home could be signing the listing agreement with their agent or even having their photo shoot done. You never know when a listing will hit. Be prepared and be ready to move. Have the right team in place and be open to looking outside the box.
Want to know whether you’re in a buyers’ or a sellers’ market? Check out Zillow’s recent analysis here.
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For more insights into the important changes happening in real estate, read Brendon’s new book “Next Generation Real Estate.” Brendon’s practical real estate advice is regularly sought out by print, online and television media outlets including FOX News, CNBC, USA Today, Bloomberg, FOX Business and Forbes. A licensed Realtor and an active investor himself, Brendon owns real estate around the U.S. and abroad and is licensed to sell in California and New York. As a trusted real estate expert,consumers often call on Brendon for advice and to help them find a real estate agent. You can follow him on Twitter or Google Plus.