What to Know When Buying in a Seller’s Market
If it were a buyer’s market, you would enjoy low prices and an enormous inventory to choose from. If you are shopping for a home in a seller’s market the experience you have is going to be just very different. There are a few disadvantages you need to know about.
- Higher Prices – You can count on paying more than you are expecting to pay for a home in a decent neighborhood. If you looked at house prices a couple years before it became a seller’s market, you will likely have sticker shock now. It is bad news for a buyer, but if you also have a home to sell then you will reap the advantages on that deal.
- Strategically Priced Cheap Homes – Finally, you find the perfect home at a reasonable price, so you can’t wait to bid on it. Guess what? Other people feel the same way. Super-hot properties are often priced extra-low to invite a bidding war.
- Dreaded Cash Buyers – For whatever reason, cash buyers seem to surface at the most inconvenient times. You will have your heart set on a home and place a bid only to get a call that someone with deep pockets is paying cash meaning you are back to shopping again.
- Slim Pickings – You use an Internet search to find real estate, but assume it is broken because it’s only providing minimal listings in your chosen area. So you click refresh and try again, but you get the same outcome. Then you try a different search tool with the same results. It is then you finally realize the selection is really just that small. This means you will need to be a little flexible in your search criteria.
- Lazy Sellers – When you view a home, you expect it to be presented in a certain way. This is a big purchase – you would at least like a little “wow” factor. Unfortunately, sellers tend to slack in this department when they know buyers are fighting over homes.
- Inaccurate Descriptions – It can be really disappointing to check out a home only to find the description made the property look a lot nicer than it is. What’s worse is you probably passed up looking at another property that sold in the meantime.
- Need to Eat Humble Pie – When multiple buyers are bidding on a home it is not always the highest price that wins. In fact, there are often multiple bids at the same price, so the seller has to choose. Writing a personal note (practically) begging to pick you can be rather humbling considering you are the one paying.
Buying a home in a seller’s market comes with more challenges other than there being fewer homes to choose from. Becoming familiar with this list of challenges will at least help you mentally prepare for what you will be facing.