How to Achieve Your Home Ownership Dreams
If you're considering entering the home buying market, and find yourself buying a house in a seller's market, don't despair. You can still get an excellent deal on your new property, even if the market is favoring sellers. Here are six tips from our RE/MAX DFW Associates team to buy the house of your dreams.
1. Give Your Best Offer, but Give it Quickly
Since the market is favoring sellers, you need to avoid the temptation to offer well below asking price. This strategy works in some markets, but not when buying a home in a seller's market. Instead, give your best offer, or close to it, and see what happens. However, don't spend so much time analyzing the home and waiting to make an offer. Seller's markets favor sellers because there are many buyers in the field, so someone else will scoop up the house while you're analyzing it.
2. Get Pre-Approved
HSH.com indicates that pre-approval letters are essential when buying a house in a seller's market. Showing that you do, in fact, have financing available will give your offer some teeth and make you more appealing in a field where multiple offers are common.
3. Be Emotionally Prepared to Lose
When you are shopping for a home, you often find yourself head-over-heals in love with a property you place an offer on. Unfortunately, in a seller's market, you may lose out on several homes before your offer sticks on one. Be careful not to fall too hard for a home until your offer has been accepted and a closing date set. If you're already mentally hanging curtains and knocking out walls, you are going to find yourself extremely disappointed.
4. Prepare for a Bidding War
No one wants to be in a bidding war, but it's always a possibility when buying a house in a seller's market. Knowing that it could be coming will help you strategize your offer. It can also help you with your search, because you need to limit your search to homes below your max budget in case you end up in a bidding war that heads over the asking price.
5. Use an Escalation Clause
An escalation clause allows you to place an initial bid with a clause that automatically increases your bid to your max. This way, if a better offer comes in, yours will trump it. This is the real estate version of EBay style bidding. Your offer remains the highest until someone comes in with an offer above your max. This can prevent you from losing the house when someone comes in and offers just $2,000 more than you.
6. Choose a Seasoned Real Estate Agent
Seller's markets are challenging for buyers. In these instances, even more than others, you need a seasoned real estate agent on your side to improve your chances of success. The more experienced your agent is, the more likely it will be that the agent has worked in this type of market before and knows how to approach the negotiations.
If you are looking for a team of qualified, seasoned agents in the Dallas/Fort Worth metro area to help you with buying a house, contact our team at RE/MAX DFW Associates today to talk about your home buying goals.