As many people are aware, the real estate market right now is a seller’s market. In many markets there is limited inventory and some sellers are able to get top dollar for their homes. The hot market does not mean you cannot or should not purchase a home right now. If you are thinking of buying a home, do not be discouraged and, instead, focus on being informed. Keep reading to learn more about buying a home in this market and set yourself up for success as you prepare to purchase a home.
Tips for buying a home in a seller’s market:
- Prepare to purchase the home “as-is” when putting in an offer on your desired home. This means that if your inspection shows any issues with the home, you will not be allowed to ask for repairs. However, you can terminate the contract based on the condition of the property.
- Plan to possibly offer above listing price. When offering over the list price, keep in mind that your lender will perform an appraisal of the property. If the home does not appraise at the purchase price, you will be given the opportunity to either pay the difference between the appraised value (which is the amount the lender will give you a loan for) and the listing price or you can terminate the contract and not proceed with purchasing the property.
- Take advantage of low interest rates. Despite potentially purchasing a property as-is and at higher than list price, interest rates remain very low and offer a good incentive to purchase right now.
- Put more earnest money down. Most real estate deals require an earnest money deposit which lets the seller know you are serious about purchasing the property. The more you can put down, within reason, the more serious a seller may take you.
- Be flexible. Especially in this market, some sellers need extra time in their homes in order to locate a home for purchase and some sellers may need to get out quickly because they have already located a new home. For this reason, the more flexible you can be with closing dates, the better.
- Hire a good real estate agent. Ensure that the agent you hire frequently works in the market you are looking to purchase in and knows the local real estate trends.
- Buy in cash. If at all possible, purchasing a home with cash gives you a significant upper hand. A seller will know that you do not have to go through the loan approval process and possibly have a cancelled deal down the road when their buyer is not approved for their loan.
- Be realistic. Be truthful with yourself about what you can afford, your timeline for purchase, and how much room there is for negotiation.
If you are buying or selling a home our attorneys are available to help you prepare and assist you with the legal process. Contact our offices to set up an appointment today.