Housing experts are predicting a competitive, tight market this spring and summer. The low inventory indicates a seller’s market, which is often good news for home sellers and bad news for home buyers.
But regardless of which side of the coin you’re on, it’s important to prepare for a low inventory in your area. This can impact how fast you’re able to buy and how fast you’re able to sell.
Here are a few tips:
What to do when selling in a seller’s market?
If you’re a home seller looking to unload a property, you couldn’t have planned a better time to sell! Tight inventory means that your property will get more attention and with mortgage rates remaining at historic lows, buyers are eager to purchase before rates increase.
Here are a few ways to ensure a smooth transaction:
Keep your price fair. You might be tempted to increase your sale price, reasoning that home buyers will pay just about anything. But it’s smart to keep your price competitive, as this will increase traffic and encourage more offers. You can even price the property slightly below market value to attract more attention. This can encourage multiple showings and multiple offers, which can drive up the asking price.
Prepare for multiple offers. You should also prepare mentally for the possibility of buyers fighting over your property. If you receive a lot of interest, carefully review each bid with your agent to determine which one is the best fit. The highest dollar amount doesn’t always win. For example, one buyer might offer more than your asking price but include several contingencies in their offer, such as closing costs assistance. On the other hand, another buyer might offer slightly less than the asking price, yet not ask for anything extra.
Be ready to move. Some buyers prefer a quick closing, so be prepared to move within the next 30 to 45 days. Needing more time can discourage buyers and they might pass on your property and make an offer on another home.
What to do when buying in a seller’s market?
Get pre-approved. Getting a mortgage pre-approval puts you a step ahead of the competition, especially if you’re competing with another buyer. If a home seller receives multiple offers, they’re likely to choose a buyer who’s been pre-approved for financing.
Start with a strong offer. Rather than offer below asking price and expect a counteroffer from the seller, start with your strongest offer and get a leg up over the competition. To prepare for a bidding war, consider the maximum you are willing (and able) to spend on a property.
Don’t ask for a bunch of extras. Since a seller will likely receive multiple offers on their property, the fewer contingencies included in your offer the better. It’s okay for your offer to be contingent on a satisfactory home inspection. However, be reasonable when it comes to extras, such as asking the seller to make improvements to the property or pay your closing costs.
Whether you’re buying or selling a home this spring or summer, getting the right mortgage loan can make your dream a reality. Contact the loan experts at FirstBank Mortgage to discuss your financing needs.
How to take advantage of a seller’s market: https://www.thebalance.com/home-selling-sellers-market-1798979
Selling your home in a hot market: https://www.nolo.com/legal-encyclopedia/selling-home-hot-market.html
5 tips for buying in a seller’s market: https://www.opendoor.com/w/blog/buying-in-a-sellers-market-tips
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