Buyers Tips for Purchasing in a Seller’s Market
Real estate markets are fickle and can change almost overnight. It’s important for Buyers to understand the dynamic of the market and know that there are strategies they can use in a Seller’s market that are different than those that work when the market is down. Although the tide has shifted subtly from the frantic housing market experienced during the pandemic, arguably one of the strongest seller’s markets in history, the Park City real estate market is still stable and in many coveted neighborhoods the ball is still in the seller’s court. Here are some tips that can be useful in navigating the challenges of purchasing a home when the market turns toward the Seller’s favor:
Professional Resources
The most important tool a Buyer can use is to enlist the help of an experiences Realtor in the market where they’re purchasing. More than any other real estate scenario, a Seller’s market is extremely competitive, and Buyers should not consider going it alone. A Seller’s market will likely drive higher prices, multiple offer scenarios and competitive bidding wars, all elements that put an unrepresented Buyer at risk of losing. A Realtor will have insider information on the current market values, can often be able to glean information on other offers a solo Buyer can’t, and which will be invaluable to navigating the purchase process for their client in presenting the strongest offer possible.
Negotiation
A Seller’s market is by its very nature not a time where Buyers have the latitude to be demanding. It’s not a time to lowball a purchase price on the home, throw out a minimal earnest money deposit or negotiate for larger home items not included in the Seller’s listing paperwork. It’s also not a time to unduly extend Buyer’s diligence periods, financing contingencies and closing dates. Especially in multiple offer scenarios practice the mentality of “highest and best” right out of the gate, a strategy which will help propel your offer to the top of the pile. If you as a Buyer are not in a position to offer cash for the property (a negotiation nugget Sellers are most interested in) then be prepared beforehand to have your bank or lender prepare a prequalification letter that can be submitted with the offer. This will help provide a level of confidence to a Seller that the Buyer has the ability to secure the financing necessary to purchase the home. The rule here is ‘Time is of the Essence.’ Put your best foot forward prior to submitting your offer by preparing and having your ducks in a row.
Be Prepared with a Backup Offer
Often times multiple offers are very close in price and contingencies. A Seller may elect to accept an offer with similar parameters as yours but perhaps one that offered cash instead of financing. It may not be the end of the line for your offer. There are a dozen reasons a purchase offer can go south-the Buyers change their mind, they don’t make it through their diligence or their financing goes south. Smart Buyers already have submitted a backup offer that can put them in first position with the Seller should the original offer a Seller accepted falls through.
