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The Commonwealth Blog

Monday, June 18, 2018

Negotiating in a Seller's Market

In many parts of the United States, the real estate market has become a seller’s one. This can be a challenge for buyers, as there are fewer homes than buyers. It's difficult to negotiate in such a tight market and even harder to find the perfect home for you. With help from an experienced Realtor, you can prepare yourself to be ready in a seller’s market.

As a buyer, it may be frustrating to feel you’re not in control of your home buying process. However, with the right techniques that address the seller’s market, you’ll more likely get the deal you’re looking for and the home you want.

Have a Prepared Preapproval or Pay in Cash

To properly negotiate, you need to be in a place of financial strength. A seller’s market often has investors and flippers with full cash offers, so you need to have your financing in place. A prequalification isn’t enough for an offer, so make sure you have an accurately written preapproval letter (related to your offer for the home) or offer cash. Your mortgage lender can customize the preapproval letter for you, which will make you look more serious to the seller and their agent.

Negotiate Respectfully

In a seller’s market, you probably don’t want to submit a lowball offer. While this may make sense for a home that’s been on the market for a while or in a buyer’s market, this can insult in a seller’s market. Your Realtor can walk you through the skilled negotiating tactics you need in a seller’s market. The seller’s agent may even bluff, suggesting they have better offers than yours. Be prepared to walk away or provide comparable properties you can purchase if you don’t want to or can’t increase your offer.

Show You’re Serious About the Listing

In a seller’s market, there may be multiple offers on a home. You need to set your offer apart from the others. If you know, you can close, offer a generous earnest money deposit and consider making it nonrefundable. This will show the seller you really love the house and want it more than a flipper or real estate investor. You can also submit a letter and photo of your family to show them why you’d be a good fit for the property. Though this doesn’t always work, it can elevate your offer.

Make a Clean Offer

While you might want to make demands of the seller in another buying scenario, in a seller’s market, this can harm you offer. If you want extensive décor removed or repainting, don’t include this in your offer. The only necessary demand should be a home inspection. If significant issues do come up, you can address them after the home inspection. Keep the rest of the offer clean and free of demands to help your offer stand out, move through the process quickly, and get you the keys.

 

Sellers’ markets can be difficult to negotiate, but with a little help and advice, you can still find your dream house. You may need to readjust your expectations slightly, but you can still find a good deal on a property you’ll love living in.


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