The housing market has undergone significant changes in recent years, with the ‘unicorn’ frenzy of high prices and bidding wars now largely behind us. However, the current market is still competitive in many areas, as the supply of homes for sale remains low. If you’re looking to purchase a home, it’s important to understand that while the peak frenzy of bidding wars is behind us, multiple-offer scenarios are still common. Here are some tips to help you navigate the competitive market and come out on top.
1. Lean on a Real Estate Professional
Rely on a real estate agent who will help you achieve your objectives and who can explain the current state of the housing market to you. Agents are industry experts in both the local market and national trends. To make sure you have all the knowledge you require to move forward with confidence, they will draw on both of these areas of expertise.
Furthermore, they are aware of what has been successful for other buyers in your neighborhood and what sellers might be seeking in an offer. Despite how straightforward it may seem, addressing the seller’s needs can make your offer stand out. According to a Forbes article:
“Getting to know a local realtor where you’re hoping to buy can also potentially give you a crucial edge in a tight housing market.”
2. Get Pre-Approved for a Home Loan
Given the current issues with affordability, it is especially crucial to have a clear budget in mind right now. Working with a lender to get pre-approved for a home loan is the best way to understand exactly how much you can borrow.
You’ll understand your numbers better as a result, which will boost your financial confidence. It demonstrates to potential clients that you are also serious. If you find yourself in a situation where there are multiple offers, that could give you a competitive advantage.
3. Make a Fair Offer
Desiring the best deal possible on a home is only natural. There are risks associated with submitting a lowball offer, though. You shouldn’t make a proposal that will be rejected as soon as it is accepted in order to see if it will be accepted. As Realtor.com explains:
“. . . an offer price that’s significantly lower than the listing price, is often rejected by sellers who feel insulted . . . Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price. However, if a seller is offended by a buyer or isn’t taking the buyer seriously, there’s not much you, or the real estate agent, can do.”
You’ll stay competitive and find a price that’s fair to both you and the seller with the help of your agent’s expertise in this phase of the process.
4. Trust Your Agent’s Expertise Throughout Negotiations
In order to place the highest bid on a home during the “unicorn” years of the housing market, some buyers skipped home inspections or neglected to request seller concessions. It’s good news that this doesn’t happen as frequently these days, according to a Bankrate article:
“While the market has largely calmed down since then, sellers are still very much in the driver’s seat in this era of scarce housing inventory. It’s not as common for buyers to waive inspections anymore, but it does still happen. . . . It’s in the buyer’s best interest to have a home inspected . . . Inspections alert you to existing or potential problems with the home, giving you not just an early heads up but also a useful negotiating tactic.”
Fortunately, the market has changed, and you might have more negotiating power now than you did before. Your trusted real estate advisor will assist you in considering which levers to pull when putting together an offer and which ones you might not want to compromise on.
The housing market may have cooled down from the ‘unicorn’ years of soaring prices and bidding wars, but multiple-offer scenarios are still a common occurrence in many areas due to low housing supply. To increase your chances of success in a competitive market, it’s key to know your budget, get pre-approved, act quickly, be flexible and make a strong offer. By working with an experienced real estate agent and keeping these tips in mind, you’ll be better prepared to navigate the home buying process and snag your dream home.