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If you are a buyer who is interested in purchasing a home, you must know you are entering a seller’s market. In such a market, sellers have more power to dictate the prices of homes, so you must prepare before you start your search for your next home. Here is a guide to help you navigate a seller’s market.
In a seller’s market, it is not uncommon for multiple people to bid on a single home. This can be difficult to deal with as a buyer, but there are ways to handle such situations. Avoid seeking out homes at the top of your budget, primarily because you can always count on someone outbidding you.
There are countless tactics sellers can use to obtain a home in a seller’s market, but one rule numerous experts agree on is to get preapproved for a mortgage before you start searching for a home. A mortgage preapproval will show sellers you mean serious business and are ready to move. According to Bank of America, roughly two-thirds of mortgage pre-approval applicants were first-time homeowners.
A phenomenal real estate agent can be your best secret weapon in a seller’s market. Not only will a great agent have excellent negotiation skills and a strong understanding of the area you are interested in, but they will also have great connections, which you can use to your advantage. Before you hire a real estate agent, you should take the time to look at their reviews and meet with people they have worked within the past. Once you narrow down your list to the top contenders, you should ask each one the following questions:
• Do you have access to unlisted properties?
• How familiar are you with the area I’m interested in?
• What are your fees?
• How can you make my offer stand out in such a competitive market?
Once your potential agents answer the questions above, you will know who to choose.
If you are ready to purchase your next home, we would be more than happy to assist you, no matter what the market looks like. Contact Open to Close Real Estate Group today to learn more.
If you are considering moving, now is the time to sell. Demand proves extremely high as individuals reevaluate where they live, and the home amenities they wish for. It is truly a seller’s market. Here are some reasons why:
There are not enough homes on the market to meet the current demand. In many areas, the housing shortage has reached historic levels. Houses are being taken off the market extremely quickly. While new construction is picking up, it was depressed during the pandemic. Additionally, a shortage of lumber has increased the price of new builds. Your home is likely to be considered by many buyers, at high price points.
Prices Are Up
Overall, prices are up, and homes are selling for the asking price. Now is the right time to price your home high and let the buyers come to you. There is a good a chance that a bidding war will allow you to get a price above your initial asking price. Even better, you're more likely to be able to sell your home "as is" rather than having to engage in expensive repairs.
Mortgage Rates Are Low
Mortgage rates may rise in the future. However, currently, they remain low. As buyers are widely advised to take advantage of this, demand has only increased.
Needs Have Changed
Following the onset of COVID-19, people have re-evaluated what they wish for in a home. As homes have become much more than a place to return to at the end of the end, many have realized they would like more home amenities. Such amenities include as an office space, at home gym and larger yard.
Of course, all of this impacts you as a buyer too. However, if you are savvy, specific about your needs and get the best deal on your existing home, you can still take advantage of the sellers' market. A good real estate agent can help buyers and sellers come out on top amidst the current market.
Demand for homes is high, and the pandemic only made it higher. It really is a sellers' market right now, and many buyers are struggling to find the right home in limited inventory.
How can you navigate the market and find your dream home?
Ensure you are pre-approved (not just an initial estimate) before you start looking. Your offer will have more credibility over competing offers. Pre-approval ensures you do not risk losing your dream home to somebody else.
Establish Price Discipline
In a sellers' market you can't get away with counter offers and lowball tactics. Don't bother with an offer below the asking price, and go for an initial bid of slightly above. At the same time, don't get carried away and bid more than you can afford. Set a firm limit and don't go above it.
If bidding goes too high, you may find that you are offering more than the home is appraised for. If this happens, your loan may not be approved. Consider talking to your lender first to get a rough idea of what they think it will appraise for.
Making a list price offer quickly can often secure the home if the seller's agent is lazy, but you must be ready to bid.
If possible, show more cash than you normally would as earnest money. Find out what a good earnest money deposit in your area is, then increase it. This helps show the seller you are serious and will help get your offer considered, sometimes even over ones which are slightly higher.
You can't afford to be too choosy about the perfect house. Make a list of your criteria and prioritize. Consider which things cannot be changed, such as location, over things which can.
You should additionally be flexible about contract deadlines. The seller might appreciate a little bit of extra time to move out.
Getting your dream home in a sellers' market involves finding a good buyers' agent who can help you establish what to bid and avoid pitfalls such as paying more than the home is worth. Combined with these tips, you can be successful in finding the house you want for the price you can afford.
The housing market has been affected by COVID-19 in somewhat unpredictable ways. The combination of the down economy and an increase in the number of people wanting to buy has resulted in tight inventory, increased demand, and higher prices.
Experts believe that house prices are going to continue to be very competitive. Some people are moving to permanent work-from-home and looking for a larger house in the suburbs, open plans are becoming much less desirable, and this is resulting in a high demand. Meanwhile, new builds are down due to the slowdown of construction last spring.
In December, the typical U.S. home was worth $266,104, an 8.4% increase over the previous year and the largest increase since 2014. While this was in part fueled by historic lows in mortgage rates, rates should stay low for the first half of the year and then start to rise in the second. This will slow the housing market a little, but not enough to stabilize prices. Those looking to buy should consider moving as soon as possible.
New builds are now increasing dramatically, which should also slow down the price increases, but there is not enough inventory coming into the market to meet demand. This has been the case for the past decade, and the pandemic has only made it worse.
As prices increase, there is pressure to buy as soon as possible, but with inventory down 30% as of February 2021, it is definitely a seller's market right now. Some might benefit from holding off for another year if possible. Supply is more plentiful at the high end, so if you have the budget you might be better off.
But now is not a great time to buy. In fact, despite high demand, sales volumes have actually dropped simply because there is so little to buy. This is a time buyers need an expert real estate agent to help them find the right property, especially as homes are staying on the market a short period of time. New builds are generally more available, but more expensive.
If you are looking to sell, on the other hand, now is a great time...as long as you can find a place to move to. The mismatch is likely to result in more people relocating into temporary rental accommodation.
The demand is high enough that you can expect your home to sell quickly, and demand is unlikely to ease for a while. Supply, however, might, as many people are waiting until after the pandemic to move out.
The economy is likely to improve significantly through 2021 and into 2022, and this should make the housing pressure slowly ease off. Right now, though, buyers in particular need expert help to find the right home. Open To Close Real Estate Group can help you buy or sell your home (or both) and deal with the current tight inventory and tough market.
It would be difficult to find a better time to sell your home than NOW. We are in a sellers' market. But, whether you are buying or selling a home, you'll need expert advice to negotiate the current landscape. Open to Close Real Estate Group is your home away from home in Madison WI for real estate expertise.
Should I Hire A Real Estate Agent?
The tendency is to enlist the help of a relative or friend who is a realtor, or even go the For Sale By Owner route. However, you are much better off hiring an independent realtor who can advise you without prejudice. There are important questions you should ask when you are interviewing an agent -- or two or three agents:
Let's look at some critical questions:
There are other questions you may have, or you may not even know yet what to ask, and we'll supply some of our own on this journey. We want to understand your goals and desires in order to connect you to the right home, the right resources, or the right buyer.
Madison is the vibrant capital of Wisconsin, as well as the picturesque home of the University of Wisconsin. It is located near four beautiful lakes, and boasts many bike trails and parks. We know and love the area, and we want you to have the best experience possible. We hope you'll also call it home!
Let us help you do an Advanced Search or create a Market Report on available properties. We'll develop a strategy with you and help you have a smooth experience through an often complicated and very detailed process. Please contact us today. We are eager to earn your trust.
The real estate market is experiencing a steady decline in the supply of houses for sale. Housing undersupply occurs just when the demand for houses is tremendously high, and there are over 4.8 million young people willing to purchase their first home.
Buyer demand is very high; any listing on the market is going quickly. The short supply of houses only signals an acceleration in prices, as demand rises steadily in 2021. For HOME sellers in Southern Wisconsin, the lack of inventory is good news.
Most home sellers are hesitant to sell due to market instability created by the pandemic. In Wisconsin, sales declined after the pandemic, and currently, the market is still experiencing shortages.
The good news is that the low inventory is fueling more demand, and you will sell your home for top dollar. Typically, your home will sell within days due to the high demand for houses.
Lenders have significantly reduced their mortgage rates to encourage home buyers to borrow more despite the market uncertainties. The low mortgage rates are boosting the purchasing power of buyers, consequently increasing the demand for homes.
The trend is quite advantageous for you as a seller, and the pent-up demand is creating high competition for houses. Since there is a supply drain in the market, your property will fetch more and sell faster.
The real estate MARKET is experiencing stability after months of uncertainties due to the pandemic. Most sellers who were hesitant to list their homes might start penetrating the market. Now is the time to sell your home since future trends in the real estate market are unpredictable.
If you want professional help when listing your home, Open to Close Real Estate Group can help. Our realtors will ensure your house is listed competitively. Contact us at 608-354-3076 or fill out our online intake form.