Home buying in a seller’s market – A seller’s market in the real estate realm refers to times when the demand for the houses outstrips the supply. The general principles of supply and demand for a seller’s market mean that the market is more competitive for the house buyer in such a scenario. If you’re looking to buy a house in a seller’s market, you should know very well that your bid for any house that you might be interested in will not be the only one. In such a scenario, your offer will have to compete with multiple other offers that must have been made for that particular property. If you ignore this essential principle, then you may very well end up losing that desirable property to another buyer who made a more competitive offer. Therefore, we shall go over some practical tips to assist you successfully navigate through a sellers’ market. The following useful tips will go on to enhance your prospects against other buyers in a seller’s market.
Pre Approval Letter
This can be the most successful tool in your arsenal when it comes to navigating through a seller’s market. It helps in communicating your seriousness to the buyer right away. A pre-approval letter essentially tells them that you’re past the window shopping phase and that you mean business. A pre-approval letter is a document from the bank that lays down the maximum amount that your bank has approved to lend you. This document will go on to firmly establish you as a serious buyer in the eye of the seller and will effectively place you right on top of his consideration set since not all homebuyers come with a pre-approval letter. Furthermore, this allows you to make a serious offer then and there if you come across the dream property that you’ve been looking for.
Offer High Earnest Money
In a way, offering to pay higher than usual earnest money effectively goes to seal the deal in your favor. Earnest money is actually security money for the seller. Buyers use this money to lock the seller in on their offer. It serves to attract the seller’s attention towards your specific offer and discourages them from taking any more offers from the competing buyers in the market. The seller holds on to the amount to ensure that the buyer does not back out from the commitment either. Earnest money is usually 2% of the price, but you can always up to the stakes a bit more to stand out in a seller’s market.
Take It Easy In the Negotiations
It is important to understand and not lose sight of the fact that a seller will naturally have an upper hand in the negotiations process in a seller’s market. Therefore, you might have to tone down on some of those aggressive demands when it comes to details such maintenance, repairs, or outstanding bills. These demands in the negotiation process might lose you the property as the seller can always go to another buyer who is less demanding in terms of repairs and maintenance.
To sum up, simple things such as showing up with a preapproval letter, offering high earnest money, and going easy with the negotiations over repairs and other minor details can come in extremely handy when dealing in a seller’s market. If you’re looking to buy a house anywhere in Orlando Florida, you can acquire our dedicated services to make the process seamless for yourself.