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Getting to know the Seller’s Market

You hear it everywhere you go these days, sometimes with a smug smile, sometimes with a resigned shrug, depending on which side of the transaction you are on, but we are definitely in the midst of a significant seller’s market.

What is a Seller’s Market, you might wonder. It arises in the real estate industry when demand for homes exceeds the supply available for purchase. The greater the gap between the two, the bigger a seller’s market exists. Since there are fewer homes on the market, sellers are clearly at the advantage.

When a seller’s market exists, homes sell faster, decisions on purchases happen much more quickly, lacking inventory can lead to bidding wars between potential buyers that can drive the price of the home above the listing price, sometimes far above.

Here is a checklist of things to know, no matter which side of the process you find yourself:

Tips for Buyers

Decide quickly! Get prepared for a loan ahead of house hunting to be assured that the money side of things is covered when you need it to make fast decisions.

Know you are at the disadvantage. A Seller’s Market is not a time to haggle on small things or ask the seller for outrageous concessions to be made. If you are able, a cash offer will always be more appealing to a seller, so they know they will not have to deal with the hassle of financing.

Patience is key! Go into the process knowing that losing out on properties is a real possibility that happens often. Do not allow yourself to become discouraged, frustrated, or be tempted to take it personally. Keep searching and the right property will come along.

Don’t Settle. The home is one of the largest investments a family makes. Be sure you get what you want, and have money built into your budget to pay a little more than you think you will to nab it when it comes along.

Tips for Sellers

Sellers are not completely off the hook in this situation, even though the odds lie in their favor. Sellers are competing with other sellers to attract the best buyers to purchase their property. It helps to understand how to increase a buyer’s interest in what you have to offer.

Keep it clean! An organized, tidy, clean smelling, and artfully presented house that is in good condition will be among the first snapped up by buyers.

Price fairly. If you take the direction of setting your asking price at or even slightly below fair market value, you will be more likely to attract more interest more quickly. Multiple interested buyers could lead to a bidding war which drives prices upward in your favor.

Consider offers carefully. Caution and attention to detail regarding your buyer’s financial and credit strength should be taken into consideration. Accepting an unrealistic offer from an unqualified buyer will just put you back at square one, wasting valuable time.

Ensure pre-approval. Lending institutions use extensive review of a buyer’s financial situation and verify worthiness in order to issue a pre-approval. On the other hand, pre-qualification is much more casually issued using just estimates of a buyer’s money situation.

Weigh out contingencies: Some offers include stipulations such as mortgage, home sale, appraisal, and inspection contingencies that enable buyers to back out of a sale if certain conditions aren’t met.

Whether you are in the process of buying or selling a home, it is essential to know where the market stands and how that effects your decisions in the process. Buyers will obviously have the advantage in a buyer’s market when properties flood in with fewer takers willing to compete for them. Sellers are primed for maximum benefit in this strong seller’s market, however.

No matter the conditions of the real estate market in your area, hiring a qualified real estate agent is the best way to navigate the housing market specific to your needs and get you what you need at the greatest advantage manageable. With a professional on your side, you will have a leg up on the competition, as the agent will have specific knowledge of the area and what you are up against.

For most families, the purchase of a home is the most significant investment they make in their lifetime. When you are making that purchase, having your financial affairs in order is essential for securing the most advantageous position to qualify for the lowest rates available. To be sure you are in the most stable position possible, follow the 10 steps below to assure you are on the straight and narrow path to a successful home loan.

Your Ten Personal Steps for Purchasing a Home

1. You should not change jobs, become newly self-employed, or quit your job.
2. You should not buy a new vehicle. (You could end up living in it if financing falls through, should you choose to ignore this step!)
3. You should not use credit cards unnecessarily or in excess. You should not let current credit accounts fall delinquent.
4. You should definitely not think of spending the money set aside for closing costs.
5. You should not leave out any debts or liabilities from your loan application. (Be transparent.)
6. You should not buy furniture on credit before your home loan finalizes.
7. You should not make any inquiries on your credit. Now is not the time to apply for any other credit cards, loans, or application processes that will require a credit check.
8. You should not make large deposits without consulting your loan officer first. No transactions should be made in any amount out of the ordinary from your normal banking activity in deposits or purchases.
9. You should not change bank accounts.
10. You should not co-sign a loan for anyone. (Good advice always, but particularly during this season in the home buying process.)

Following these steps along with having all financial documentation located and sorted in an organized manner should have you on your way to a happy ending for your successful loan application. As always, if any assistance is needed, be sure to contact your real estate expert or mortgage representative. They are always available to help you through this exciting process.