Mistakes To Avoid When Buying In A Sellers Market

Dated: 07/01/2017

Views: 484

Image titleRecently, you may have heard things like "we are in a hot sellers market", or "housing inventory is low right now".  But what do those things mean?  What exactly is a "seller's market"?  Basically, it's the law of supply and demand.  In many areas of the county, and especially here in Northeast Ohio, many cities have more buyers looking for homes, than quality listings on the market.  This creates demand and drives prices up, which is great if you are thinking about selling, but can be rough if you are looking to buy. If you are looking for a home in a seller’s market, you need to have a plan in place to avoid making mistakes.  Here are 5. common mistakes buyers make and how to try and avoid them.

  1. Working With An Inexperienced Agent
    In a seller’s market, it benefits buyers to get all the help they can. If you have a seasoned agent on your side, you’ll probably have a better chance of getting the home you want.  Working with an experienced real estate professional can save you a lot of time and stress, as they know the ins and outs of the process and can provide strategic advice when buying in a tough sellers market.  Plus they will be able to offer tremendous insight into upcoming inventory.  

  2. Not Being Preapproved For A Loan
    You might know that you’ll be approved for a mortgage loan based on your great credit score and steady income, but the seller probably doesn’t know that. The only way to prove to a seller that you’re a qualified buyer is to be preapproved from a lender.  Not getting preapproved sends a message to the seller that the buyer may not be taking their house hunting seriously.  Getting a preapproval involves speaking with a lender as well as providing verifying documents.   Submitting a preapproval with an offer shows the seller that the buyer has already set the wheels in motion and is serious about the deal.  

  3. Not Making Your Best Offer
    Trying to buy what we want for as little money as possible is deeply ingrained in us. So when most people see the listing price of a home, they naturally wonder what they can really get the house for. Offering lower than asking price is a reasonable strategy, especially if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best tactic. In a seller’s market, a lot of buyers do not come in with a strong enough offer.  With a shortage of inventory the competition is usually fierce.  So if you really like a house, it's best to come in with a strong offer.

  4. Acting Out Of Desperation
    It is really easy to get frustrated if your offers are declined repeatedly and some homes you don't even have a chance to see before they are under contract.  But try not to become overly emotional because once desperation sets in, you risk making an impulsive and unwise decision.  You might talk yourself into a home that isn’t quite what you really want or paying more than you can afford.  A great agent will kelp keep you focused and make sure you are not just buying a house, but you are buying the right house.   

  5. Over-Analyzing
    Just as impulse-buying a home is risky, over-analyzing a home purchase in a seller’s market is a bad idea. If you wait too long, you risk losing the home you have fallen in love with.  As soon as you find a house that fits your needs/wants, in a location you desire and in your price range, don’t wait to 
    make an offer.  Be prepared to move quickly by having your finances in order. “

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