Shopping for a new home can be a completely different experience depending on whether you are shopping in a buyer's market or a seller's market. In a buyer's market, there are many homes on the market, which means that the buyer has the advantage in the negotiations since there are many other options. In a seller's market, on the other hand, homes for sale are few and far between. That means that the seller has the edge because there are far fewer homes for the buyer to consider. As the buyer in a seller's market, there are some things you should keep in mind when you are looking at the residential property for sale.
Consider Your Funding
In a seller's market, the funding that the buyer is using can make a big difference. If it's possible, aim for a cash sale. When faced with the option of a cash purchase compared to a traditional mortgage purchase, sellers are far more likely to take the cash offer in a seller's market.
That's because mortgage loans can be unpredictable, leaving the seller at risk of a sale falling through if anything goes wrong in the process of finalizing the mortgage. If you want your offer to have an edge over the competition in a seller's market, you'll need to remove that risk by submitting a cash sale offer.
Think About The Inspection
Another common trend in a seller's market is for buyers to make an offer without a contingency for a home inspection. Just remember that if you waive the home inspection, you'll be financially responsible for any issues that would otherwise be uncovered during that inspection. This is a risky choice because you'll have no way of knowing if there are any structural, electrical, or other problems with the home before you buy.
Although many people will offer to waive the home inspection, there is another alternative. If you're comfortable with taking the financial responsibility for any issues, you can make your offer with the home inspection being for informational purposes only. That contractually binds you to buy the home regardless of the home inspection results or lose your earnest money if you back out. However, it can make your offer more attractive to the seller.
Talk With Your Realtor
Finally, before you make an offer on a home in a seller's market, take some time to talk with your realtor. They will have the necessary real-time experience to tell you what the trends are related to accepted offers.
In some cases, offers may need to be well above the asking price, may need to be free of any contingencies including the sale of your home, or might need to include other enhancements. For example, you may need to agree to certain use restrictions or requirements in order for your bid to be accepted.
Your realtor is your best source of information for this type of offer. Spend time talking with them about not only those current trends but also about the listing history of the property that you're interested in. That way, you can craft an offer that will grasp the seller's attention. For more information about residential properties, contact a real estate agent.