If you’re currently looking to purchase a new home, the current market may present a difficult challenge. Right now, many real estate markets in the country are seller’s markets.
A seller’s market means that the supply of homes for sale is lower than there are homebuyers. This typically leads to a faster rate at which homes are sold. In many cases, buyers are willing to pay higher prices than usual.
A seller’s market is an ideal situation for those wanting to sell their homes for a good profit margin. However, if you’re exploring the Winthrop real estate market as a homebuyer, you might find yourself in a pinch. Fortunately, there are ways to ease the situation. We’ve compiled a few tips and tricks to help you navigate a seller’s market.
Get pre-approved and prepare your documents
In a typical buyer’s market, homebuyers can get pre-approved to help boost their offers. Unfortunately, in a seller’s market, getting pre-approved is considered a minimum requirement. Without pre-approval, sellers may not even agree to show you their homes. That’s why before you start your search, it’s a good idea to contact a lender first and get pre-approved.
Consider making an all-cash offer
Many homebuyers today find themselves competing with all-cash buyers. People who make all-cash offers are either real estate investors who plan on renting out or flipping the property. Sellers want to avoid the risks that come with accepting an offer with a mortgage loan, so they typically prefer working with a buyer who doesn’t need to obtain financing.
If possible, consider making an all-cash offer. If this is not a good option for you, consider taking a more emotional approach when negotiating with the seller. Highlight the property’s sentimental value and position yourself as someone who will preserve and take care of the home rather than an investor who will tear it down or rent it out to different tenants.
Consider adding an escalation and appraisal gap clauses
A sellers’ market is especially competitive, so many homebuyers add an escalation clause to their offer. In a nutshell, an escalation clause raises your offer when a competing buyer makes a higher bid than yours. Note that a downside to having an escalation clause is that you might end up with an appraisal gap.
An appraisal gap is the difference between the agreed sale price and the lender’s appraised value of the property. If you do add an escalation clause, make sure to indicate the increments at which you will raise your offer. You should also have a ceiling offer, which should be close to your budget and to what the property is actually worth. That is, unless you’re willing to make up for the difference between the sale price and appraised value yourself.
Shop for homes a bit under your budget
Looking through homes that are a little under your budget allows you to have more room to offer above the asking price. It also lets you have some funds left over for renovations and other home improvements that you may need to make.
Try to avoid additional requests or demands
A seller’s market isn’t the time to bargain with the seller about the price of the home or the features and appliances that you want. Keep in mind that the seller may easily find a buyer who’s willing to pay for the full price of the home without any additional demands.
Connect with an agent you can trust
Purchasing a home involves a lot of preparation, strategizing, and negotiations. You’ll need to prepare various paperwork, meet with the home seller, and navigate an extremely competitive market. If you’re looking to buy a house in Winthrop, WA, work with a real estate professional you can completely rely on and who will be available to address a seller’s questions or concerns at a moment’s notice. Find an agent who is highly familiar with the local real estate market, is an expert at negotiations, and will always advocate for your best interests.
Looking for great homes for sale in Winthrop, Washington? Our team at Coldwell Banker Winthrop will be happy to help. Get in touch with us by calling 509.996.2121 or sending an email to info(at)cbwinthrop(dotted)com. You can also leave us a message here.