From the moment you begin to browse properties online to when you’re handed the keys to your new home at the closing table, there is a plethora of decisions to make throughout the home buying process. It’s not unreasonable to think that you’ll make a few mistakes along the way – but in a seller’s market every misstep is magnified. With a bit of knowledge, however, and a savvy real estate agent by your side, navigating a hot seller’s market doesn’t have to be catastrophic.
With these 5 tips you’ll be better able to avoid the pitfalls that plague nearly all homebuyers in hot seller’s markets.
#1. Getting Overly Anxious
In a seller’s market, you’re likely to compete against multiple offers. That’s why when you find a home that seems to fit all of your criteria, it is incredibly difficult to avoid getting overly anxious and rushing to buy the house. Knowing that others are bidding on the same house should not change your own buying parameters. Carefully consider any decisions to push the limits of your loan approval, accept contingencies that you otherwise would not entertain, or make uncomfortable concessions.
Our Advice: When you start to feel anxious, just remember, this is not the last house on earth. Take a moment to measure your desire against the reality of the situation. All you can do is make your best offer. If it is passed on, keep looking.
#2. Waiting Too Long
Now that we’ve told you to calm down, don’t wait too long! Kidding – no, but seriously, there is a big difference between getting overly anxious and waiting too long in limbo weighing your options. In a seller’s market, you do not have a lot of time to sit around second-guessing yourself. Thoroughly go through other relevant comps in the neighborhood with your realtor so you’re educated and ready to move quickly on the next suitable home that comes on the market.
If the home is in your price range, fits all of your criteria, and you have evaluated your goals, go ahead and put in an offer. While you’re waffling, another buyer may swoop in.
Our Advice: Know what you are looking for ahead of time, make a list, and when all your non-negotiables are checked, go ahead and make your best offer. Again, if someone else gets the house, then it wasn’t meant to be – move on. At least you won’t be kicking yourself for hesitating when you should have acted.
#3. Going it Alone
If you have an experienced agent helping you buy a home, you can avoid these and many other mistakes that buyers make in a seller’s market. Falling back on their knowledge and experience in the market can help you in the long run.
Our Advice: Talk to the most experienced buyer’s agent in your area, they can help you navigate the heated terrain of a hot seller’s market.
#4. Guessing About Finances
Time is of the essence in a hot seller’s market. Since we’ve already established the need to act quickly and know your limits, it only makes sense that you would have a good idea of your financial capabilities in advance of house-hunting.
Our Advice: Speak with your mortgage professional in advance and get a pre-approval letter. Not only will you know where you stand financially, you’ll be able to attach the letter to your offer to show the seller’s you’re a serious, pre-approved contender.
#5: Getting Caught Up In Minutiae
In a seller’s market the demand for houses outnumbers the supply of them, giving sellers have the upper-hand. Because your offer may simply be one in a line of many, it’s important not to write an offer that’s overly-concerned with minor fixes, saddling the seller with unnecessary repairs and delaying the sale. They’ll simply move on to the next offer. Try a home warranty credit instead, that can help eliminate the back and forth in negotiations and ease buyer concerns.
Our Advice: While you should never abandon crucial contingencies – even in a hot seller’s market -it’s important to consider whether arguing over who fixes that broken garbage disposal is worth losing your dream home over. Discuss home warranty credits and must-have contingencies with your realtor to submit the best offer possible for you and the seller.