Interested in buying or selling a home? Then you should know the exact market conditions at that moment.
Here in Des Moines, we’re in an extreme seller’s market in almost all price ranges and areas. This means that there are more buyers looking for homes than there are homes for sale. Seller’s markets lead to a lot more competition for each property and can also bring additional stress to buyers.
The real estate market cycles through these two stages throughout the year, meaning the outlook for a buyer can be a lot different from one season to the next. If it is a seller’s market though and you don’t have the ability to wait it out, stay hopeful. There are ways to buy a home.
Tips for Buying in this Hot Market
Buying in a seller’s market doesn’t mean that you’re going to have to overpay for a home, just as selling in a buyer’s market doesn’t mean you won’t get a good deal on your property. But if you’re buying when demand is high, you’ll have to edge out the competition if you want to score your new home. You also might have to work some flexibility into your strategy in terms of closing requests and negotiations.
Get Your Finances in Order!
You have to be ready to act fast in today’s market, which means that you don’t want to be held up waiting for mortgage approval or figuring out whether a certain home aligns with your budget.
Sit down with a mortgage specialist; you can find out your budget, proposed monthly payments, and more. It can be tempting to seriously up your offer in a seller’s market to compete—especially if bids are going up on a home you really love—but knowing what your spending limits ensure that you don’t purchase more home than you can comfortably. It also provides its own competitive advantage, since sellers are usually more likely to go with the buyer who is the surer bet.
Know what you want! (and don’t want)
If you’re going to act fast, you’re going to need to know right off the bat what checks off the right boxes for you and what doesn’t. This includes key features like location, number of bedrooms and bathrooms, and how many cars can fit in the garage. It also extends to potential dealbreakers. Are you willing to buy a home that needs some love? Do you need a home office or a yard for a furry friend?
Knowing your needs and wants will help you quickly narrow down homes during your search. It also means that when you find the home that fits the bill, you won’t have to second guess yourself on whether you should move forward.
Be Ready to Act
There’s no time for dilly-dallying when you’re buying in a seller’s market. From scheduling showings to making a formal offer, you need to be on the ball and ready for action at all times. Homes in a seller’s market can fly off the market in hours, and there’s no guarantee that a home you’re interested in today is going to be available tomorrow. If you want to sleep on your home decision, you may never get to sleep in the home.
Of course, being ready to act doesn’t mean jumping the gun. It’s still important to make wise and informed decisions, since buying a home may be the biggest purchase you’ll ever make.
Keep the Offer Simple
Asking prices tend to be higher in a seller’s market, with lower inventory increasing demand and boosting the inherent value of what’s available. Just because you’re going to be paying more however doesn’t mean you should always ask for more in return.
For the best shot at an accepted offer in a seller’s market, try to keep it as simple as possible by minimizing your contingencies as much as you can. Contingencies (which are certain factors that must be met before a sale can go through, such as needing to sell your current home first) muddy the waters of an offer and provide sellers with less confidence that a closing will actually happen.
While certain contingencies are often necessary (you probably shouldn’t waive your right to back out after a serious find during the inspection), asking for too many contingencies could lead to a seller immediately writing you off in favor of a cleaner offer. The same goes for things like asking for closing dates that don’t work for the sellers, or discounts for certain home repairs.
Sweeten the Deal
Just as an overcomplicated offer can potentially turn a seller off, a sweetened offer can easily make you the most attractive buyer. Ways to do this include offering at or above the asking price, being flexible around the closing date, or putting down more earnest money.
All home sales usually require some sort of concessions on either the part of the buyer or seller (or both). Showing that you’re willing to up your offer makes it clear to the seller that you’re serious and can make the difference between finding a house quickly when you’re buying in a seller’s market and extending your search period for weeks or months.
Ready, Set, Buy
We know that buying a home in a hot seller’s market is a bit stressful and emotional. We are here to help. For each specific home, we’ll look at the comparable properties that have sold to advise on price, let you know if there are red flags, and present your offer in the best way possible. We are here to walk you through each step, so you’re confident in your decision. And when you find the right house, you’ll know that you’re ready to buy.