Lack of inventory, rising prices, multiple offers on new listings—all confirmation that we are indeed in a sellers’ market.
Finding a home in today’s market is challenging for buyers, but there are ways to help improve your chances when the right house does come up.
Preapproval vs a Prequalification—There are two levels of in qualifying for a loan to make an offer on a house. When it’s a sellers’ market, it’s a good idea to ask your lender to take all of your information up-front so they can provide a full-fledged preapproval letter vs. the more initial prequalification letter. This can tell sellers that you are a safer bet because you’ve turned in all of your documentation needed for the loan process already.
Multiple offers are very common right now. You have to be prepared to submit offers over the asking price and with terms that are more agreeable to the seller then to you, the buyer. Working with an experienced agent that can guide you in this process is key, as there are many ways to help strengthen an offer. Some of the ways include removing contingencies, such as home inspections, or making inspections As-Is, which tell a seller that they will not be required to make any repairs. Increasing good faith deposits, shortening up the settlement timeframes and using price escalation clauses are all other ways to help buyers win in a multiple bid process.
And, buyers, don’t despair—Dannielle Hale, chief economist for Realtor.com, put it in her recent 2021 forecast that: “The housing market in 2021 will be much more hospitable for buyers as an increased number of existing sellers and ramp-up in new construction restore some bargaining power for buyers, especially in the second half of the year.”