A buyer’s market has more properties for sale than prospective buyers, which usually means it’s a great time to buy real estate because sellers are more likely to go with a low bid.
But that doesn’t mean you can’t buy a new home in a seller’s market—when there are more buyers than homes—and sellers can afford to hold out for higher offers. You just need to make sure and arm yourself with the right information. Here are four ways to get the most for your money when buying a home in a seller’s market.
1. Start your search Early
Buying a house in a seller’s market requires diligence, which means you need to begin conducting research before you even think about attending open houses. Since homes are priced to sell, you need to know what you want, how much you can spend and what isn’t negotiable.
Make the most of your time by obtaining information about the house you’re interested in, looking for any disclosures on the property, property reports and how long you have to make an offer. If you’re not sure where to start, your real estate agent will be happy to help you locate different homes that suit both your style and budget. They can also help you with the process of making an offer.
2. Make a compelling offer
Once you’ve found a home you’re interested in, then it’s time to put in your offer. Make sure to research what homes in the same area have sold for before making an offer. You should also ask if the seller is offering concessions.
Concessions are extras that some sellers offer to offset the selling price. But try not to request concessions at the outset. If the seller is working with a real estate agent, they already will have that information. And your agent can fill you in before meeting with the seller.
3. Demonstrate credit worthiness
Be sure to get prequalified before touring homes. The last thing you want is to find your dream home, and then not be able to secure a mortgage. Prequalification will help you better narrow your search and exclude any homes that are out of your price range. It also shows the seller you’re serious about buying.
4. Incorporate the escalation clause
Escalation clauses state that you’ll pay a certain amount above the highest bid up to the maximum offer. It’s important to know that some sellers also might make a counteroffer to your escalation.
This means they may actually increase the listing price and ask for more money. While choosing to accept the offer is up to you, it’s always better to sleep on it and, if necessary, contact a real estate attorney for further advice.