Finding More Home Buying Options in a Seller’s Market

A strong seller’s market is ideal when you own a home that you’re looking to sell. Supply is short; homebuyers are abundant. Within the margins of logic and reason, you can name your terms.

Buying a home in a strong seller’s market… well, that’s another story. It can be exhausting. Discouraging at times. Often a longer process than you may have expected.

Don’t give up, though. You’re in pursuit of the American Dream, and the fact that you have so much competition now is a positive sign for the future prospectus of your investment once you find the right place. Here are some quick tips that may make your house hunting efforts a little less frustrating.

Make some concessions on your criteria

When supply is short, becoming a little more flexible on your “must-have” list can turn up some additional options. If a home doesn’t have the second bathroom, is there an option to add one later? Maybe there isn’t central air, but is the ductwork already installed to distribute the heating, making the conversion fairly simple? Are there peripheral communities to your core search area that offer more value for your dollar? Adjusting some of these criteria could put you on the path to more options.

Look below your budget in order to stay within your budget

If you have a $375,000 maximum budget and you’re finding that homes you are seeing and making offers on in that price range are selling for over the asking price, you may need to consider lowering your top-end number.

In the example of a $375,000 top-end budget, seeing homes that are listed for $360,000 and below could be the ticket to keeping yourself from buying above your comfort zone. This also puts you in a stronger bargaining position to present an over-asking price offer to the seller, whereas some of your competition may not be able to (since $360,000 is their top).

Another factor to look at closely is the annual property tax rate, which can consume a LOT of your buying power. Realistically, you don’t live with the price you paid for your home once you make settlement; you live with the monthly payment.

Every $1,200 of property tax is $100 per month in payment, which is roughly $20,000 in purchase power. So if you have the option to focus on properties with lower property taxes at slightly higher prices, this could also afford you some additional options above your top end budget.

Look fast and bid first

Once you have your home search in gear and you are actively looking, stay active in your search until you get an offer accepted. Don’t get discouraged and “take a break” when you make an offer that is not accepted. Keep looking. Be one of the first people in the door to see the home, and if you like it, be the first one to make an offer. And make it good enough that the seller doesn’t want to show the house anymore.

The truth is, most home sellers view their real estate agent as their trusted advisor on how to manage the sale of their home, just as you do with your agent and your home purchase. Each agent has a slightly different approach, which affects the recommendations they give. Some will present offers they receive on an “a la carte” basis — that is, as they receive them. Others will plan to allow for showings on prescribed days and review all offers on an also-prescribed bid deadline date and time.

If you happen to catch a property that is being marketed by the former category of agent, being the first one in the door and the first one with an offer presented, you could be the winning bidder.

Use your imagination

You’re not the only person looking for a home that is move-in ready. If this is the only condition of home you’re willing to consider, you’re going to have a lot of competition in a seller’s market.

Use your imagination a bit. Be willing to view the less-than-perfect homes in the communities that interest you most, and see them for their potential. Grabbing a home in a competitive market sometimes means being willing to veer off the beaten path and go for the home that has its fair share of shag carpets and wallpaper.

Buying in a strong seller’s market is no easy task. But with the right information and a little bit of creativity, you can make it happen. Buying a home is a life-changing accomplishment, and nothing that is worthwhile comes without its struggles. Stay the course and reap the rewards. Hopefully, putting these tips into action will help you do just that!