The real estate market often fluctuates, making it tough to predict whether the market will favor buyers or sellers when it’s your turn to buy. Buyers in a seller’s market can get what they want, but they need to bring their “A” game and be decisive. Here, Trulia discusses common mistakes and how to avoid them.
- Not making your best offer
Offering lower than asking price is a reasonable strategy, especially if the house is overpriced compared with other similar homes in the area, or if it’s a buyer’s market with lots of available inventory. But trying to get a deal when you’re in a seller’s market might not be the best tactic. In a seller’s market, many buyers don’t step up with a strong enough offer. There is usually a shortage of inventory and the competition is fierce, which means you should come in with a strong opening offer.
- Over-analyzing the purchase price
Once you’ve determined the type of home you want, the location you desire and your price range, and finally find a home that meets your qualifications, don’t wait to make an offer. You can give yourself more leverage by being prepared to move quickly and having your finances in order. Know how much you can truly afford, repair any credit issues, have your down payment in hand and delay any other major purchases.
- Working with an inexperienced agent
If you have a seasoned agent on your side, you’ll probably have a better chance of getting the home you want. Plus, in most cases, buyers don’t pay real estate agents; sellers do. Working with a real estate professional saves time and stress, as they know the ins and outs of the process and can provide tremendous insight regarding upcoming inventory.
- Not being prequalified (or better yet, pre-approved) for a loan
You might know that you’ll be approved for a mortgage loan based on your steady income, your low debt-to-income ratio and your high credit score—but the seller probably doesn’t know that. The only way to prove to the seller that you’re a qualified buyer is to be prequalified from a lender. Pre-qualification means that you simply told your lender your financial story. Pre-approval involves submitting a mortgage application, complete with providing verifying documents.
- Not being prepared for a bidding war
If there is ever a time when a bidding war could arise, it’s during a seller’s market. No buyer wants to be involved in such a battle for fear of possibly going over budget. Be sure to set your search below your max budget to leave room in case of an over-asking bidding war.
- Not learning from your mistakes
It’s easy to become frustrated if your offers are declined repeatedly. Learn from your last transaction so you can move in to your dream home. Come back with serious intent to lock up the next greatest opportunity.