How to Buy a House in a Seller’s Market
Buying a house is a huge decision at the best of times, and it’s even worse when the market favors sellers. When more people are trying to buy than to sell, prices are high, and finding your dream house may seem impossible. But don’t give up. These guidelines will help you buy the right house, even in a seller’s market.
Avoid Offer Nights
In some cities with hot housing markets, offer nights are common. This means that on a certain night, the house will essentially go up for auction. The sellers will accept offers from any buyer who is interested, and then go with the highest bidder. In fact, if two bids are close, they can encourage both buyers to bid higher. Essentially, the seller is hoping for a bidding war – and this is often what happens. They will often price the house well below the amount they actually expect, knowing that buyers will end up overshooting by far. Even if most houses in your area have an offer night, not all will. You may not be able to see the offer nights on the listings, but your real estate agent can, so ask him or her to only take you to houses that don’t have an offer night.
Buying a house is probably the biggest financial decision of your life, and it’s vital to not overbid. It can be tempting to increase what you’re willing to spend by telling yourself you’re sure to get a raise next year or that you’ll cut back on Starbucks. However, if you pay too much, you won’t be able to afford your mortgage – and you’ll make less money down the road when you sell the place. Don’t forget that this isn’t only a home, it’s an investment. Put in a reasonable offer and be prepared to walk away if the sellers want more. If you do put in a bid at an offer night, try not to be surprised or disappointed if you’re outbid. Patience is the name of the game. No matter how much you love a particular house, there will be others you love just as much. Think long term and use your head, not just your heart.
Look for Potential
One of the best ways to get a good price is to find a place that may not appeal as much to others. This way, you’ll be competing with a far smaller pool of potential buyers. Search through house listings carefully. Check out the ones that are brand-new on the market in case you can scoop one up before it gets too much attention. However, you should also investigate those that have been on the market for longer. Some of these houses have obvious issues, but some have simply been overlooked. You may find a house that doesn’t photograph well but looks great in person or an older home that needs some fresh paint and appliances. Buying a fixer-upper is another great way to get a good price, especially if you have cash on hand for repairs. You could even flip the house right away for a tidy profit. This is especially smart if you’re handy enough to do the renovations yourself. Your dream house doesn’t have to look like your dream home the day you buy it, as long as it has potential.
Good luck in your search for a house. Even though it’s a seller’s market, people can and do find new homes to live in. By avoiding offer nights, not overbidding, and looking for potential, you can score a great deal, too.