Buying a home in a low-inventory market is a stressful experience. Many buyers are extending offers on the same limited number of properties, using strategies such as all cash offers or escalation clauses with no cap. If youre trying to buy a home in a low-inventory market, consider these tips to help you navigate a stressful homebuying experience.
Strategize With Your Broker
Before looking for homes or extending offers, sit down to create a strategy with your real estate broker. Your broker should be highly knowledgeable about the local market and should be able to put together a plan that is unique to your homebuying situation. It should include strategies for navigating multiple offer situations and how to make your offer stand out.
Put Your Best Offer Forward
A low-inventory market isnt a time where you should be holding your cards close to your chest. Your first offer should be your best offer, and you wont typically be able to negotiate much. Sellers have the advantage of accepting the highest offer”often above the asking price.
Avoid Homes at the Top of Your Budget
If you dont want to go over your budget, avoid looking at homes at the top of the range. This is because homes will often sell over asking price, putting the house at a price you werent planning on paying.
Buy With Renovations in Mind
Buying a completely turnkey home isnt wholly realistic in a low-inventory market. Viewing properties with a remodelers eye can help you see past imperfect layouts. Working with your broker, your offer may be more appealing if you indicate you wont request repairs. Having a contractor, architect and designer lined up before purchasing a home will help you better visualize any changes you want to make and will enable you to move quickly once your offer is accepted.
Be Ready to Move
Low-inventory markets typically have a quick turnover and shorter contract lengths. This means that buyers need to be able to close and move quickly. Therefore, when you put an offer on a property, you should have a packing and moving plan in place. Being able to close quickly could also make your offer more appealing to sellers.
Take Advantage of Covid-19 Industry Impacts
Being strategic about where youre home searching can be an advantage in a low-inventory market. For example, during the shutdowns early on in the pandemic, the construction industry was one of the industries that was impacted. Now that the home builders have been back to work hone in on new construction properties that may be vacant and available to buy.
The same strategy goes for homes in resort areas. Whether peoples plans to buy a vacation home changed for financial reasons or resistance to travel, properties in resort areas may also be an intelligent approach.
Published with permission from RISMedia.
