The real estate market is constantly evolving, presenting both challenges and opportunities for potential homebuyers. As you enter the market, it’s important to understand that many dynamics come into play, including fluctuating mortgage rates, changing property values, and varying inventory levels.
There’s often a mix of cautious buyer optimism coupled with seller motivation that can vary depending on local conditions. The number of houses for sale, known as property inventory, can fluctuate significantly, impacting your options as a buyer.
While low-ball offers are unlikely to deliver a bargain in most markets, you may find that you have more time to negotiate and make considered decisions compared to periods of intense competition. The level of buyer enthusiasm can vary greatly depending on local market conditions and broader economic factors.
Market conditions can change throughout the year, potentially affecting the number of properties available. Traditionally, certain seasons see an increase in listings, which can be good news for your negotiation position and the breadth of choice available to you. However, it’s important to remember that well-presented properties often garner the most buyer interest, and you may face some competition for these desirable homes regardless of the time of year.
If you are looking to buy in the current market, here are some strategies that may be helpful:
First big decision
You’ll need the best agent at your side. They will know the neighborhood price trends, a range of suitable properties for you and how to negotiate to win your desired home. If you’re buying in the spring or summer, make sure they have the bandwidth to give you the focus you deserve.
Always research
Do your homework on the types of property you intend to target. A Comparative Market Analysis will help guide you on price trends.
Organize your money
You can miss out on great opportunities because you were slow to respond. So, get your loan pre-approved to ensure you can act quickly when you see your next dream home.
Earnest money
Have a small amount of cash on hand to use as earnest money. That’s around 1% of the asking price to demonstrate your genuine interest in buying. It’s not a deposit and does not legally bind either party. Your earnest money is deducted from the price when you settle.
Making an offer
Don’t worry about how much the seller wants for their property. Instead, focus on market value. You should be able to justify any serious bid by citing the market analysis.
Leave headroom
Even if you love a property, don’t commit all your money in your first offer. Leave room to negotiate a price 5% to 10% above your initial offer.
Price isn’t everything
Sometimes, owners will take a lower price if you’re prepared to cut a deal quickly or give them additional time to find their next property. So, not everything is about money when you negotiate.
Walk away
Sometimes, negotiations with the seller don’t work out. Do not be afraid to walk away. There are always other properties. It may not seem like it at the time, but it’s true.