As we all know, buying a home can sometimes be challenging. This is especially true when the supply of homes is low, and the demand for them is high. When you have this situation, you have yourself a seller’s market. Currently in Florida this has been the case for many months now. With many buyers going head-to-head with other buyers to score the home of their dreams, it’s no wonder that some are left feeling frustrated with the entire experience. It doesn’t have to be that way, though! In fact, we will be discussing how YOU can survive a seller’s market as a home buyer.
Tip #1 – Make yourself available
With the speed at which homes these days are selling in this seller’s market, you need to be on top of your game. This means answering phone calls, emails, texts, especially if they are from your realtor!
According to the Fannie Mae Home Purchase Sentiment Index, most renters (around 61%) think it’s currently a good time to become a homeowner. In fact, this percentage has hit a five-year high, according to the study. What does that mean for you? Lots of competition, and you have to act quickly.
Homeowners are also feeling the pressure to sell, as the low housing supply is creating financial opportunities for them to make more on the home sale.
So, make sure to make yourself available so we can keep in touch and work together to help you find the home of your dreams, and act quickly to buy once you do find it.
Tip #2 – Avoid making offers that are too low
The increased competition to buy your next home in a seller’s market, means that multiple offers might be on the table for your dream home. As a result, if you make an offer that’s too low, your offer might not be considered at all. Moreover, you could run the risk of offending the homeowner, and they might not entertain any more offers from you… even if they are higher.
This means we have to approach the offer process differently; instead of making an offer below asking price, and negotiating with the seller, you may want to consider the asking price or somewhere near it as your starting point. Keep in mind that some homes do get sold above asking price in a seller’s market, so you’ll have to consider what kind of budget you have available in this scenario, too.
Tip #3 – Consider multiple neighborhoods
I know, sometimes it’s hard. You fall in love with a specific area of town, but the prices can feel out of reach. This is especially true in a seller’s market. However, here in Florida there are SO many beautiful areas in the state to consider. If you widen your search, just a little bit, to include nearby areas, I bet you’ll find a home that you will love.
Here’s the thing: there are a lot of good deals and overlooked properties in up-and-coming neighborhoods that you can consider. Sure, you might have to drive a few more minutes to work or school, but it could be a small price to pay for a home that you and your family will love for years and years. As an ancillary bonus, you might find that there is less competition in these up-and-coming areas, which might mean you have a little extra time to make the offer to purchase in a strong seller’s market.
Tip #4 – Work with a Buyer’s Agent
To get the best home buying experience, I highly recommend you work with a Buyer’s Agent. Sure, it might sound biased, but working with a professional can really help you a lot, as you navigate this tricky home buying process in a seller’s market.
If you’re unfamiliar, or if this is your first home purchase, A Buyer’s Agent is an agent that helps you navigate the real estate market. In addition to this, they can help you shorten the home buying process, and hopefully save you a few bucks along the way!
Real estate professionals like these have a wealth of information you can draw from, as they will be able to help you find properties that work for you and your family, help you negotiate the offer, and they can even recommend other trusted professionals to guide you through other parts of the home buying process. It’s no secret, lots of parties get involved when you buy a home. You’ve got home inspectors, movers, lenders, and other real estate professionals to deal with sometimes, so having someone in your corner is important.
Tip #5 – Pay attention to mortgage rates
Have you seen mortgage rates lately? They are the lowest they’ve been in a LONG time. According to Freddie Mac, mortgage rates are hovering just below 3% currently. This could be one of the biggest factors influencing the seller’s market and the decision for buyers to enter the market; there’s the possibility for them to lock in historically low rates. Now what does this mean for you?
To put it simply, having a lower mortgage rate means you’re paying less in interest over the life of your mortgage loan. Sounds great right? Who doesn’t want to save money?
Look at these numbers: for the week ending September 3rd, 2020,30-year fixed-rate mortgage rates averaged 2.93 percent. If you looked at this same statistic only one year ago, it would have been 3.49 percent! That might not sound like a big difference, but when you stretch it out over a 30 year loan, the savings really start to add up for home buyers.
Tip #6 – Don’t overlook new construction
Let’s face it, the housing market is INTENSE right now. There are fewer homes for sale, and buyers are hungry for properties creating a strong seller’s market. During times like this, some buyers step away from existing homes and look into new construction. Let’s talk about new construction and what it means for your home buying experience.
Even though home builders had many projects come to a halt at the beginning of the pandemic, things changed over the summer. Now, demand is sky high for new construction, and according to Realtor Magazine, “Builder confidence now matches the highest on record from 1998, as homebuilders feel more upbeat about new-home construction’s strong rebound.”
While there may be an additional cost when it comes to new construction, the benefits are numerous. One of the big ticket items is maintenance cost of your property. While new homes aren’t necessarily free from repair needs, the likelihood is slimmer than an existing property. Just think about it! A house with a brand new roof, AC system, and floors could mean a lot less stress for you as a new homeowner. Additionally, new construction properties will sometimes include home warranties, to help provide even more peace of mind to home buyers.
Tip #7 – Figure out financing ahead of time
This is a big one. If you see a property you really like, you want to be able to jump on the opportunity and submit an offer in a seller’s market. Having your financing all figured out beforehand makes this much simpler. And, it’s actually pretty simple to get pre-qualified for a mortgage. You just need to do a little bit of digging to find the lender that’s best for you, and then submit an application to get prequalified. Once you’re good to go, the prequalification is usually good for a period of time, so you can feel more confident as you submit offers to purchase. As a nice added bonus, you can get an idea of what your budget really looks like after prequalification, as lenders can help you determine what you can afford to borrow.
Tip #8 – Get your paperwork together
Along with your prequalified loan from your mortgage lender, you will want to have additional paperwork handy. For instance, if your lender can give you an approval letter to bring with you, that’s even better. That way, you’ve got the proof in hand that you can actually make this purchase.
Additionally, you’ll want to make sure you gather the necessary documents for your lender ahead of time. While the prequalification may include just a quick credit check, the actual process of being approved for the loan. The type of paperwork involved can include bank statements, proof of income, and more. To know exactly what you need, speak with your lender and they will point you in the right direction.
Tip #9 – Don’t be afraid to compromise
With fewer homes available in the market, you’d be doing yourself a disservice by limiting yourself to a handful of housing options. For example, let’s say you really want a three bedroom, two bathroom home. This is a very popular configuration for homes that many buyers search for, and it means more competition. However, you could consider a 3 bedroom, ONE bathroom home instead. Or, maybe you could look at homes with two bedrooms and two bathrooms. Sure, everyone’s needs are different, but these other homes may have other qualities that can offset the loss of certain features. Maybe the two bedroom house has a larger yard, a garage, or even a pool! Here in Florida, that pool might make a big difference in your comfort level during the hot summer months.
Tip #10 – Consider searching during off-season
Spring is one of the most competitive seasons for home buying. Couple that with a seller’s market, and you’ve got some tough times ahead if you’re not prepared. One way to avoid those difficulties is to consider searching during other times of the year. Examples of quieter seasons in real estate include back-to-school season, as well as holidays.
Tip #11 – Don’t overlook the home inspection
While the feverish demand for homes might incentivize you to work faster throughout the process, you don’t want to cut any corners. This is especially true when it comes to home inspections. Some buyers might opt to purchase a home as-is, in order to provide a more compelling offer or close the sale more quickly. This could end very badly, though, because homes may have structural or other unseen issues that can be a real headache later on. Make sure you still conduct a thorough home inspection. Sure, sellers are required to disclose any and all issues that are known with the property, but there could be something they don’t know. Furthermore, many lenders require this step to be completed anyway, because they want to make sound investments too.
As a bonus, if there are defects or required repairs that show up on a home inspection, you might be able to get the seller to cover the costs of the repairs. Sometimes that works, sometimes it doesn’t. In a seller’s market, you may not have as much leverage as you would have in a buyer’s market, for instance.
Tip #12 – Set up a home appraisal
So, you’ve had the home inspected, everything seems safe, sound and functional in the home. Now what? Well, now you want to make sure the house is actually worth what you’re about to pay. This is another step that’s likely to be required by your lender. Lenders don’t want to pay more money than the house is actually worth. This is where the appraisal comes in.
Now, how would this issue realistically present itself to you? In a buyer’s market, sometimes you run into bidding wars, where buyers are competing to purchase a home and they drive the price up higher and higher. If the price gets too high, this can cause issues with lending. If the appraisal is lower than the cost of the home when it’s all said and done, you can either pay the rest in cash, or ask the seller to reduce the price of the property based on the appraisal.
Tip #13 – Working with an inexperienced agent
We already talked about making sure that you find a Buyer’s Agent to work with. However, it is important to do your research. A more seasoned agent might have that extra edge that could help you nab the home you are truly after in this volatile seller’s market. Additionally, there is really no downside when it comes to choosing experienced agents. Most of the time, when you work with a Buyer’s Agent, they are not charging you directly. Instead, sellers often (but not always) cover this expense on the back end of the process. Plus, the more experience your agent has to offer, the better equipped they are to handle the stress of the whole process, while you can focus on enjoying your search for the perfect home. Talk about a no brainer!
Tip #14 – Learn from your mistakes throughout the process
Let’s face it, there are a lot of important things that have been covered in this video. You might not remember to consider each tip that has been discussed today, and that is OK. Even if you do not happen to have the winning bid on the first home you see, that does not mean you will not find something great later. Good things can take time, even in a seller’s market. Have patience, follow these simple tips, and rely on your agent for the support you need to get the job done. That is why we are here!
Every day I work with people like you who are relocating out of state, especially to Florida. Who do you go to get answers to all your questions? Where do you begin? My goal is to provide answers related to relocating to Florida, the Florida lifestyle, real estate and otherwise. So welcome!
New videos every WEEK – SUBSCRIBE to this channel if you want to learn about real estate, home ownership, or living in SARASOTA – SUBSCRIBE
LETS BE FRIENDS!
PROPERTIES SEARCH + BLOG: https://lyndseyashley.com/
I am so grateful for all you subscribers, both clients and Realtors, so thanks for watching my videos! Lyndsey is a Sarasota area Realtor with Keller Williams. She loves Sarasota, houses, and helping clients buy and sell real estate.
#LyndseySellsSarasota #ListwithLyndsey #SarasotaFL #Sarasota #Relocation #Florida #housingmarket #realestate
DISCLAIMER: All content provided on lyndseyashley.com and the Lyndsey Ashley YouTube channel/social media platforms are for informational/entertainment purposes only. The owner of Lyndsey Ashley social media makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. Information provided is subject to change, please consult Lyndsey directly or another licensed real estate agent to receive the best expertise for your specific situation. The owner of Lyndsey Ashley social media will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.