How to Navigate a Strong Home Seller’s Market
Isn’t it an amazing feeling when you finally make the decision that you’re ready to purchase your very own house? After all, purchasing property is considered the ultimate goal if you’re trying to achieve the “American Dream.” But, what happens when you want to buy when it’s a hot seller’s market? Is it going to be a walk in the park or an utter nightmare?
We aren’t going to sugar coat it… Entering a seller’s market, as 92% of real estate agents who took part in HomeLight’s 2020 Q3 survey will be quite competitive. However, we have a few tips that’ll make the experience a little less stressful.
1. Do your homework
It’s not uncommon for buyers to spend hours browsing real estate websites looking for the perfect house, but they rarely do their research about the neighborhood. You don’t want to move into a neighborhood that doesn’t have the amenities important to you, or the folks in the community aren’t welcoming.
Spend some time at local parks, stores, restaurants, and coffee shops so you can get a feel for the area and see if it’s a place you could see yourself living in.
If you have children, you’ll also want to look at the school district and how they compare to others nearby. GreatSchools.org is an excellent resource to see how both public and private schools rate across the nation.
2. Be pre-approved for a mortgage
If you’re trying to set yourself apart from other buyers, you’re going to want to get pre-approved for a mortgage. Buyers who have a pre-approval letter are more appealing to sellers because they know the buyer is serious and will have the funds to buy.
To be preapproved, you will need to have a few things with you when you meet with a loan officer. You’ll need to bring:
- Proof of income:
- Tax statements for at least the past two years
- Latest pay stub that shows your year-to-date earnings
- Other income streams, such as child support, settlements, alimony, and so on.
- Proof of assets:
- Bank statements (checking and savings)
- Investment accounts
- Cash reserves
- Proof of creditworthiness – the lender will typically run a credit check. They are looking for good credit scores and solid payment history.
- Proof of employment – Although the latest paystub will show that you’re employed, the lender may want to contact your employer or, if you recently changed jobs, your current employer to verify your employment and salary.
Reminder: a pre-qualification letter is not the same as a pre-approval letter. A pre-qualification letter gives an estimate of what you may be able to borrow. A pre-approved letter means you’ve shown your creditworthiness, and you’re very likely to get a mortgage providing your finances, and your credit score hasn’t changed.
3. Hire a real estate agent with a proven track record
Buying a house isn’t easy, and it’s not something you’ll want to do on your own. An experienced real estate agent familiar with the neighborhood and has happy clients will be your new best friend.
They’ll show you houses that meet your needs and your budget. They’ll be able to answer any questions you may have about the process of buying a house and so much more!
How do you find said real estate agent? You could ask friends and family for referrals if you’re moving to a nearby neighborhood. Checking out online review sites and compare reviews and testimonials will be worth your time.
You can even “interview” real estate agents to feel how knowledgeable they are about the area, how many successful transactions they have under their belt, and even ask for references.
A good rule of thumb to follow is to listen to your gut when you’re talking to an agent. If you feel like you and the agent aren’t compatible, they don’t seem very knowledgeable or don’t seem very interested… Don’t sign any contracts and find a new agent STAT!
4. Don’t be afraid to submit your best offer first
Of the agents surveyed, 87% say the inventory in their area is incredibly low, despite it being a seller’s market. Buyers need to be prepared to submit their very best offer from the start. This could be submitting a clean offer – an offer without any contingencies, repair requests, or asking the seller to help with closing costs. Buyers need to set themselves apart from any other offers that may come through, and a clean offer may be your best bet.
If you’re uncertain about submitting an offer, lean on your real estate agent! They will guide you through the process and give you suggestions regarding how much money you should offer and what you should or shouldn’t include.
5. Consider adding a personal letter with your offer
An unconventional method buyers are using to appeal to a seller is submitting a personal letter with the offer. The letter’s purpose is to show the seller how much it would mean to the family to live there. It will show the seller that you are serious about buying their house, but it’ll also let the seller know that it’ll be in good hands.
You might include in the letter what you love about the house, mention you share similar hobbies (if the house isn’t vacant), and maybe an anecdote or two. Just keep in mind that you’re writing a letter, not a novel. Stick to a single page and get to the point.
However, it is worth pointing out that some folks feel you should not write the seller a letter when making an offer due to potential lawsuits being brought. You’ll need to decide how you feel about this and if it will help.
When we are buying a house, it’s not uncommon to feel like you’re getting in over your head – especially if it is your first time diving into the real estate market.
We hope these tips help ease your worries. We like to say when in doubt, lean on your real estate agent! They’ll be able to answer all of your questions and give you the reassurance you may need.
Final Thoughts on Navigating a Hot Seller’s Real Estate Market
Without a doubt, we have been in one of the strongest real estate markets favoring sellers for quite a while. It is very challenging for home buyers. Buyers need to act right away and make sure they are making a competitive bid. Those who don’t see their offer ending up in the losers pile.
Hopefully, you have found these tips for navigating a seller’s market to be helpful.
About the author: The above article on home buying tips in a hot seller’s market was written by Maddi Arcurio. Maddi works for Homelight and enjoys writing on all things about real estate to help buyers and sellers make the wisest decisions possible.