5 Ways to Get That House in a Seller’s Market – It’s a tough seller’s market out there right now for buyers. Homes are on the market for less than a day depending on how they’re priced and their value. So how is a buyer supposed to get the home they really want? Multiple offers, bidding wars, and escalation causes are definitely the norm in a lot of real estate transactions these days. And you might be doing a lot of research on the best way to get a home in such a tough market.
Being prepared is definitely one of the biggest things the buyers can do but there are other ways to land the house in a market that seems to be stacked against them. Here are five ways to get that house in the seller’s market.
#1. Understand the housing market for where you want to buy.
The real estate market in Mesa is going to be completely different than the Tempe real estate market. Similarly, homes in Glendale and Paradise Valley are going to be selling at a different rate than those in Peoria and Phoenix.
It really helps to know where you want to purchase a home and then understand all you can about the housing market in that area. Make sure you use an agent with our company that is well-versed in that area as well. Some of our agents work specifically with condo buyers, others with sellers and some with single-family homes as well as luxury properties.
Make sure you understand what’s going on in the neighborhood and the nuances in that particular economy and community. This will set you up for success.
#2. Make sure you’re not overpaying in a seller’s market.
In a way, learn to conduct your own mini-appraisals. You don’t want to be offering too much for a house so that it doesn’t appraise for the higher amount and then you have to come up with the difference.
However, some appraisers use the price per square foot which isn’t always the case, but it’s a good place to start. Condition, location, amenities, lot size, and a dozen other factors play into pricing a home so talk to your agent about what a home should be worth and how much you’re willing to go over that amount, if any, to get the home.
#3. Lay out a plan of how you’re going to pay more than the asking price.
Once you’ve determined the housing market in the area in which you want to buy and you understand the basic values, set a plan on how you’re going to make an offer in a seller’s market and that usually means offering more than the asking price. Talk about an escalation clause, which means that you are willing to pay a certain amount over the highest priced offer that the seller receives in certain increments up to a certain price.
For instance, if you’re buying a $400,000 house you can put in an escalation clause stating that you’re willing to pay $5000 over the highest priced offer the seller receives up to $450,000. However, the seller needs to provide you proof that they have another offer on the table and the property doesn’t appraise for the inflated amount, you’ll need to make up the difference. Having all of your ducks in a row ahead of time is a great way to plan for this type of approach.
#4. Offer concessions.
In this unique seller’s market, many buyers are waiving the home inspection contingency, feasibility contingencies, and even finance contingencies in some situations. While these all need to be carefully considered, you can also offer concessions as part of your bid. An inspection cap might be offered to assure sellers that they won’t have to spend over a certain amount in certain repairs or replacements even if you do have a home inspection.
One important factor to consider is to have your buyer’s agent contact the listing agent on what the seller really wants and their motivation. By designing the offer around the seller’s terms, you can appeal to the seller and be more lenient on what they want rather than on what you want.
#5. Get preapproved for more than the asking price.
In the past, lenders will offer a preapproval letter stating that the buyer is approved for the exact amount they are offering the seller. But in today’s unique market, sellers want to know if you are approved for more, potentially up to the maximum amount of your escalation clause. While this is sort of like showing your hand of cards to the seller, it may also help you get the sale.
This is a unique market but the more buyers can be prepared financially and with knowledge of the housing market, a great, aggressive real estate agent is willing to negotiate for the perfect terms for both buyer and seller, it can be a win-win for both. Contact our office at any time if you’re having issues trying to land the right house in Phoenix. We help luxury home buyers throughout the Glendale, Peoria and Phoenix metro area find exactly what they want in terms that work for both buyer and seller.
Are you looking for more help navigating the real estate market during these confusing times? Check out more informative articles here on our blog. For more information on Peoria real estate, Paradise Valley homes for sale, Phoenix real estate market and Glendale AZ property, contact my office at any time.