How to be a buyer in a sellers market
In a seller's market, homebuyers must be willing and able to act fast to snag the home they want. This spring, areas across the country have a limited number of homes for sale.
To help buyers succeed, realtor.com created a cheat sheet for surviving a seller's market:
- Be on call. "If you're only looking now and then when it's convenient, you're probably wasting your time," says James Malmberg, a real estate professional in Sherman Oaks, Calif. He suggests treating house hunting like job hunting. If someone calls with a lead, follow up promptly to gauge whether it could be a good fit – and don't linger.
- Bring the paperwork. To be taken seriously, buyers would be wise to get a mortgage pre-approval letter as well as a "proof of funds" form from their bank to show they have enough to cover a downpayment. They'll be able to act quicker when they do find the right house.
- Limit the contingencies. In a seller's market, buyers may need to drop some of the contingencies to score the house. Sellers prefer the fewest number of hurdles to closing as possible. If your buyers come in with several contingencies – such as "if" they secure financing – sellers are more inclined to bypass their offer and take another with less hassle. Also, "don't waste your time lowballing a seller," advises Sean Kelley, a real estate professional with Howard Hannah in Pittsburgh, Pa. "Always put in an aggressive offer."
- Cast a wide net. Search for homes outside prime locations if faced with limited or high-priced choices. Buyers need to carefully consider what they're willing to compromise on. "Sometimes properties sit, even in a seller's market, because of a problem that is scaring other buyers away," such as some renovation work that may need to be done, Malmberg says. Those "flaws," however, might not be a big deal to your buyers. "Finding a house this way can also cut down on the amount of competition you will face," Malmberg adds.