Are you looking to buy? Have you seen some challenges while shopping? For the remainder of 2021, most homes will sit in a seller’s market. So how does one buy in a seller’s market? Here is what you need to know.
Firstly, what is a seller’s market?
In a seller’s market, there are more home buyers than homes listed for sale. The result is fewer listings and high competition with multiple offers on one home. Some listings even face bidding wars. A buyer’s market is exactly different. There would be more homes for sale and not enough buyers. When the two are a happy medium, a balanced market occurs. Create a budget before you start searching and know your market conditions prior to diving into the seller’s market. Check out this monthly home budget planner here to begin.
In the last RE/MAX housing outlook, it was determined that 32 of 39 housing markets examined are seller’s markets. Only West Vancouver B.C and St. Johns Newfoundland were buyer’s markets. That is a small window for home buyers. In fact, the majority of homebuyers in 2021 looking for homes in any of the 32 housing markets will face limited supply and lots of competition. So, how do they do it?
Understanding market conditions is the first step towards a successful transaction. Know that what is happening in one neighborhood may not be occurring in the next. Given the insight of homes selling for asking and if not, a higher price, know how to be quick a decisive. If you find a property that interests you, make a strong offer. This doesn’t address just the money for a home. There are many moving parts and a couple of conditions to consider when making an offer.
A common condition for first-time homebuyers is conditional on financing that requires a sign-off before the deal goes through. Generally, a home appraisal is performed and must go through the bank first. Another is conditional on the home inspection. If a home inspection is performed and comes back with some issues. The buyer can request the repairs, a reduction in price or can take back the offer completely. Lastly, the conditional sale of a home refers to the home buyers wishing to sell their home prior to purchase of a new home. If you are seeking more help in understanding these terms, check out the home buyers guide here.
These conditions are not particularly what a seller wants to hear when they list their home. But it protects the buyer. Of course, if you are a buyer, be prepared to pivot. You never know when home might go up for sale or a better opportunity arises. And if you have your sights on a home and it doesn’t get accepted, don’t take it personally. You need to have thick skin in a seller’s market.
Work with a Pro
If you are really nervous about how to buy in a seller’s market, your best action to take is to get help from a pro. A real estate agent carries all the tools to help you purchase your dream home. From better access to knowing the neighborhoods, they can really help make your search painless. If you are still unsure as to where to start, read RE/MAX’s Home Buyers Glossary here.