Real estate markets are constantly fluctuating from being a buyers market to a sellers market. If you're looking at homes for sale during a period of time that is considered to be a sellers market, you will need to be prepared if you want to have your offer accepted on a home that you love. Avoid the following common mistakes that buyers make during a sellers market:
Failing to Get Pre-Approved for a Mortgage in Advance
In a hot seller's market, homes typically are not available for long and sellers often get multiple offers. If you have not already been pre-approved for a mortgage and can prove that you have your financing in place, sellers are likely to pass over your offer and choose another buyer who has been pre-approved and can close quickly. Before starting your home search during a sellers market, always make sure that you are pre-approved for a mortgage and know the difference between being pre-approved and pre-qualified.
Neglecting to Make Your Best Offer Up Front
During a buyer's market, buyers have some leverage and more room for negotiation since sellers do not have as many options when it comes to buyers. But this all changes during a seller's market. If you view a house that you absolutely love, it is essential to put in your best offer up front. Submitting an offer below asking price during a seller's market likely will not get you the house you want because there is a good chance that someone else put in an offer for asking price or even higher.
Working With an Inexperienced Real Estate Agent
A seller's market can be a very tricky time for buyers, which is why it is in your best interest to work with an experienced real estate agent. A seasoned agent is more likely to know how to navigate a seller's market and may have a large network of connections with other agents, which may make it easier to know when a property is going to be listed on the market. If you're trying to buy a house during a seller's market, a great agent is one of your most valuable resources.
Not Being Prepared for a Bidding War
Bidding wars are not uncommon during a seller's market, but many buyers are not prepared for them. One thing that you can do during a seller's market is search for homes that are under your budget. Doing so allows you to put in an offer for the asking price or slightly higher but still leaves you room to increase your offer if there is a bidding war for the house.