Buying in a sellers market is, in a word, difficult. It can be discouraging to buyers to be up against several other buyers for every home that hits the market in their price range. It can feel overwhelming and frustrating and even impossible.
But it doesn’t have to. And this is where we come in. Picking the right agent is the single best thing you can do to aide you in the buying process. Almost always, the Seller will be paying for your agent – which makes it almost crazy to go it alone or to not do your due diligence to find the best agent you can.
At NextHome All Pro Realty we have a team of knowledgeable agents working closely with a seasoned and savvy Team Leader. We are a tight-knit team and we take pride in each other’s success as well as our own, so our goals are aligned. When the team does well, we do well – and vice versa. We don’t hold secret pocket listings close to the chest, we let each other know. Working with a NextHome APR agent is like working with the whole team and having access to the whole team’s potential inventory even before it goes live on the MLS and enters the traditional market. This is key. You will also have access to the combined expertise and strategy of the team.
We win together.
Things to keep in mind when selecting an agent:
- Experience. Experience of the agent, the team, and the broker. It is imperative to have a leg up in negotiation knowledge and a good agent is the best move you can make.
- Access. Access to knowledge of pre-listing properties can be the difference between buying a house this season and not. Also, access to the MLS through a Board of Realtors is imperative for real time listing results.*
- Always Ready. Easy to get a hold of and has an office assistant. This is important when it comes to writing offers and handling each detail between offer acceptance and closing. You cannot afford to miss a detail.
In a sellers market the days on market (DOM) are short and time is of the essence. The time to see a house that comes on the market and fits your criteria is immediately. It’s important to have an agent who is receiving real time updates from the multiple listing service (MLS) and who can alert you right away and make time in their schedule to accommodate a timely showing. You don’t want to lose out on a house because your Realtor is sleeping on the job.
Top Tips for Buying in a Sellers Market:
- Find the Right Realtor. Use the tips above to help you with your selection.
- Finances. Make sure that you have a pre-approval letter from a mortgage company, or the appropriate cash proofs, for the full amount that you are approved for, are comfortable with, or have access to before you step foot in a showing. It is a common misconception that you don’t want to submit proofs for over the offer amount. In a sellers market it shows your negotiating power and confirms that you are financially sound and will not have issues providing funds for closing.
- Timing. Set the showing and see the houses that come on the market and fit 80% of your criteria same day when at all possible. Make home buying your priority and call in favors and outsource the rest of the duties in your life when needed in order to make first day showings if you’re able. Timing is everything.
- Perspective. It’s likely that you will need to compromise on something on your “ideal property” list in a seller’s market. Prioritize your list, put it in order or importance, outline your deal breakers and make sure your agent has a copy. See the properties that come close, the ones that have crappy pictures, and the ones without pictures if they come in and check most of your boxes. Properties show differently than they photograph, and potential is easier to see in person. When is doubt, see it.
- Contingency Expectations. Set your expectations low for appraisal and inspection negotiation. It is still important to get a home inspection as it gives you the opportunity to “walk” from the deal without penalty is major issues are found and a satisfactory agreement cannot be reached for repairs. But minor issues and repairs you should expect to pay for yourself when buying in a sellers market. With appraisal, especially if your offer is over asking, you may need to bring more cash to closing to cover the gap between the agreed sales price and the appraised price in order to keep the deal. Your agent is the best person to help you navigate negotiation, choose a good one.
- Offer Intelligence. Second to timing, a strong offer is the best thing you can do to secure the property of your dreams. When buying in a sellers market, its imperative to start strong. It feels counter intuitive to start with your best offer or to go in over asking right off the bat, but that is typically the name of the game in a sellers market unfortunately. Your Realtor will be able to best advise you, but you should consider the following: An over asking price offer or an offer with an escalation clause (automatic incremental counter bids with a set cap if another offer is received by the seller), a personal letter to the seller (can help swing the vote your way if the competing offers are comparable to yours), doubling or tripling your EMD amount (you are going to be paying closing costs anyway, consider paying them in a chunk up front to strengthen your offer), allowing your offer to be a backup offer if another offer is accepted over yours (something to consider if you’re flexible and the house is *the one*). If you are paying cash and are handy, you could consider waiving all contingencies (mortgage, appraisal, and inspection) to strengthen the offer. None of these “tactics” should be employed without the complete guidance of a reputable Realtor who can analyze your unique needs and position.
- Flexibility for the Seller. Being flexible for the seller is an often overlooked strategy. Consider putting yourself in the Seller’s shoes, what would make an offer stand out to you? How abount offering to use the title company of the seller’s choosing, allowing the seller to set the closing date and time (within reason and adhering to your contingency timeline), shortening your contingency time frames (inspect immediately, spur along your mortgage company at regular intervals and agree to the earliest closing date you can), and being flexible with your move-in (their move-out) date? Those are all great value adds to a competitive offer with very little “cost” to you.
Another thing to consider when buying in a seller’s market is to find a local builder and see if they have anything coming up in your price range that haven’t been listed yet, or if they have any lots available to custom build. Check out DW Development in Northville.
We know that this is a lot of information to digest. The great news is, a good agent knows all of these things. As long as you choose wisely (Ahem, NextHome APR) you will be in a great negotiating position.
Best of luck to you! We hope to hear from you soon.
* Did you know that not all real estate agents are Realtors? In order to be a Realtor an agent needs to be part of a board and take an Code of Ethics oath. All agents at NextHome All Pro Realty are licensed Realtors. More on that.