Secrets to Buying in a Seller’s Market
Trying to buy a home in a seller’s market can be difficult. When it’s a “seller’s market,” this means there are more people looking to buy homes than there are homes available for sale. This benefits the seller because they can set a higher-than-usual asking price when listing their property. Consequently, this situation also hurts the buyer in two ways. First, buyers know from the start that they’re going to be paying more for a home than they would if it were not a seller’s market. Second, buyers may end up paying even more than the already-inflated “seller’s market” price if they also have to outbid other buyers in order to have the seller accept their offer.
So, how can buyers get an edge in a seller’s market? Speaking to a Nashville mortgage lender before you even start house-hunting will help you get a good plan of action in place to raise your chances of being accepted. Here are some pointers that will help.
Prequalification and Pre-Approval
It’s old advice but it’s still relevant in today’s market. Before you do anything, get yourself pre-qualified. When you’re prequalified, it means you have had a general assessment regarding what you may be able to afford. This will keep you from falling in love with a home that you may not be able to afford. Once you find a home you like, you might then continue to the pre-approval process. In this stage, many documents will be requested from you in order for your Nashville mortgage lender to submit a complete loan application, where income, credit, and assets are verified, and where your loan package is then forwarded to an underwriter. After further review, the underwriter will let you know in writing that you have been approved for your mortgage.
Do Some Research
Once you find an area in which you’d like to live, check online real estate listing to see the prices being asked for the homes there. This will give you a realistic idea of the price range for buying in that area. If the homes in that area are selling for more than your prequalified amount, you will need to refocus your home search to an area that is more affordable. You can also ask your Nashville mortgage lender for a list of sales in your area of interest that have closed in the past 90 days.
When it’s a seller’s market, if you have been prequalified to spend $400,000 for a home, there is no sense looking at one priced at $500,000. Additionally, if you find a home listed for $400,000, which also has multiple offers from other buyers, it would make no sense to offer $350,000 (or a lower-than-listing price) because you can assume that at least one of the other offers is already offering the sellers their asking price. More likely, those other offers are offering more than the asking price. If you were in a buyer’s market, however, the opposite of both scenarios may very well be appropriate.
Know When to Take Action
While house hunting in a seller’s market, if you should see a property early in your search that ticks all of the right boxes for you, don’t be afraid jump on it. The fear of potentially missing out on another “even better” house you may come across later in your search has caused many inexperienced house-hunters to lose a great house because they didn’t act quickly enough to make an offer.
There is also nothing wrong with helping your agent in the home search. Get out to open houses and search online. It will give you and your agent more options. Just make sure the agent you have isn’t afraid to do the work involved to get that home that you want. They should have their finger on the pulse of the market, as well as a solid network of agents and sellers to work with.
By following these tips, and contacting a Nashville mortgage lender like Accurate Mortgage Group at the beginning of your home search, you’ll be able to more easily navigate your way through buying a home in a seller’s market.