5 mistakes to avoid when buying a home in a seller’s market
Many economists have predicted that 2017 will be another good market for home sellers. If you’re planning to move in the year ahead, that’s good news for your home sale, but it could mean certain challenges for your purchase. Whereas buyers can get away with certain missteps when the market is against sellers, it’s important that you be at the top of your game when buying in a seller’s market. Below are six common mistakes and how to avoid them.
Making a weak offer
Negotiation is an integral part of real estate transactions. So called “asking prices” are just that—figures that are commonly undercut and bargained down by buyers. Nonetheless, there has to be a logic and a strategy behind your offer. Any number you present to the seller has to be justified by market prices and the seller’s motivation level. If inventory is low, buyers are many and the seller is patient, a poor offer may spoil a promising opportunity. Work with your real estate agent to properly assess the situation and develop a competitive strategy for bidding on the home of your choice.
Moving too slow
You can hardly blame someone for wanting to take their time with what is likely one of the largest purchases of their lives. Just the same, in a seller’s market, you should do everything you can to act prudently but quickly on a deal when needed. Sort out as many of your needs and wants as soon as possible regarding home location, size, price range and other factors. Have your finances in order and get prequalified for a loan for your price range. If possible, have a plan to move into your new home quickly should the seller stipulate a short timetable.
Not being ready to compete with other buyers
It’s tough enough negotiating against the seller when buying a home. Bidding against one or more other buyers can be especially intimidating. It’s particularly disheartening to see the offer price on the home of your dreams being bid up rather than down, potentially straining your budget or forcing you to walk away from the home. For this reason, conducting your search below your max price range is a good idea as it leaves you with the wiggle room to outbid competing buyers if necessary.
Getting easily discouraged
When buying in a seller’s market, you should be prepared for at least some frustration. Each home can only have one buyer, and you should do your best to accept that one or more promising candidates for your dream home may slip away. Learn from each experience, stay positive and continue your search until you seal the deal on the right home.
All’s fair in love and real estate bidding wars, but with this advice, you’ll be better prepared to make the most of a home purchase in a competitive market.