Buying in a seller's market can be tricky. When the market doesn't favor buyers they face higher competition and even higher sale prices.
However, it is possible to get a good deal on a home in a seller's market, if you play your cards right.
An experienced realtor can help you navigate the perilous waters of a seller's market and get you into your dream home. As a local agent with an in-depth knowledge of the market, they'll know the tips and tricks that can save you money when buying your next house.
Here's what you need to know to get started buying a home in a seller's market.
How do you get a good deal in a seller's market?
When real estate inventory is slim, new listings don't stay on the market for long. Once you've decided on a neighborhood, be vigilant. Check local home listings frequently— at least daily.
Additionally, start your search early, well before you need to make the move. The more time you give yourself to find a home, the easier it will be.
Be ready to make an offer. Secure mortgage pre-approval and proof of funds for the down payment, as well as any necessary supplemental paperwork. Once this is done, you're free to look for homes in your price range and compete with other buyers.
When you make an offer, make it strong and clean. Don't try to lowball in a seller's market, offer the listing price or even exceed it, and try to minimize contingencies in your offer. When sellers have several options, they're more likely to settle on the one that points to the cleanest, quickest transaction.
How do you determine a buyer's or seller's market?
In a buyer's market, there is an excess of homes for sale with few home buyers. It is easier for a home buyer to get a deal in a buyer's market because sellers are in competition with other sellers to find prospective buyers.
In a seller's market, there are fewer homes for sale and an excess of home buyers. Home sellers are more likely to net a profit in a seller's market because they will have many buyers competing to buy their home.
To determine whether you're in a buyer's or seller's market, it's a good idea to consult with a professional. An experienced real estate agent will use their knowledge of the industry to give you an idea of what to expect in your market.
Will house prices go down in 2019?
Home prices are not expected to decrease in 2019, they are predicted to increase in the next 12 months. According to August 2019 data from Zillow, U.S. home values have gone up by 5.2%, and they are forecasted to rise an additional 2.2% in the next 12 months.
The median home sale price is $235,500 and as home values rise, so will sale prices.
Will 2019 be a buyer's or a seller's market?
The market currently favors sellers, as home values and prices rise, sellers are making a profit on their home sales. Millennials and younger buyers are expected to enter the housing market in the next few years, marking an increase in the number of potential buyers.
Why are house prices so high?
House prices are high because home values have steadily risen after the last housing market crash. Currently, the United States real estate market is a hot seller's market. There's more demand than the market can supply, thus sellers have the ability to ask for higher prices on their homes.
Since 2014, the median income of a U.S. household has steadily increased. Unfortunately for buyers, home prices are predicted to continue their upward rise in the next 12 months. For sellers, this means they can expect to net a decent profit on their home sale.
How much earnest money should I put down?
Earnest money tells the seller you are serious about buying their home; the larger the deposit the more committed you seem as a buyer. Typically sellers ask for 1% to 5% of the home purchase price in earnest money, but if you want your offer to be more appealing you can pay more.
How Clever Can Help
Clever will help match you with an experienced agent in your area to help you get the most out of your home purchase. Clever Partner Agents are top-rated, full-service agents who work to get into your dream home.
In eligible states, Clever Partner Agents work to get you a Home Buyer Rebate of $1,000 or up to 1% of your home's purchase price if it exceeds $500,000.
Interested in working with a Partner Agent on your next home purchase? Get in contact with us today and we'll match you will a top agent.