Wednesday, April 10, 2013
Buyers: How to Win in a Seller's Market
1. Size up your town. First you'll need to determine whether you could be in for a bidding war. Rising price tags are a sign that sellers are gaining ground, but prices often lag the market. Two other stats, available on real estate site Zillow, can mean an area's heating up: a drop in the percentage of homes with list price cuts, and an increasing ratio of sales to asking prices.
2. Don't skimp on credit. With many sellers worried about deals falling through, you'll need the bank's blessing right away. Don't waste time on prequalification, which is an estimate of how much you might be able to borrow. Try to obtain a pre-approval based on your credit, income, and assets is better, and full credit approval, which goes through the bank's underwriting department.
3. Get a veteran on your side. Finding an experienced agent is even more important in a competitive market; you'll want a pro who specializes in working with buyers and who knows the local players and pricing trends. One of your first questions should be whether the agent has experience in multiple-offer situations. A good agent can help you determine whether a home is fairly priced, advise you on how much to offer -- and back up his/her counsel with data and examples.
4. Make a clean offer. When you take the leap, remember that the best offer isn't always the one with the best price. It's the one with the fewest hassles and outs for the buyer. Make yours as straightforward as possible. If it's contingent on selling an existing home, for example, you're unlikely to win a bidding war. Set on a certain closing date? Consider whether it's worth blowing the deal. In this market, the answer is probably no.
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