With flat mortgage rates in the wake of the pandemic, the U.S housing market saw a rapid drop in the number of available properties. The result? By October 2020, the supply of homes for sale hit a record low. Buying a home against that backdrop isn’t easy.
But buying a home in this seller’s market isn’t exorbitant, and it’s not impossible. There are things you can do to make your offer more enticing aside from just offering more money. Let’s break down what you need to know to buy in this market:
Buying a home in the modern market
The modern housing economy is cutthroat. If you’re wondering how to buy a house right now, you’re in for some sobering news. With an ever-increasing demand that’s consistently higher than supply, it’s a seller’s market.
But don’t let that put you off. Compared to renting a property, buying always comes out on top. Buying affords you tax benefits and lets you plan for the future. And mortgage rates increase a lot slower than rent does.
So if you’re new to the game, your first step is to assess your finances. This means two things: Checking your credit rating and building your green file.
Your credit score will tell you what sort of property you can buy, while your green file contains all the documents you’ll need to land an offer. Bank statements, investments, your 401k, and tax returns.
Making an Offer
You’ve found your dream home and it’s in your price range. Congrats!
Now you’ve got to go about crafting an offer that will stand out from the competition. The key issue new homeowners are uncertain about is this: Should you go over or under the asking price?
In an ideal world, sellers would be open to a lot of negotiation. But as we said before, there are more buyers than sellers. In other words, no. Bidding under the asking price will only turn your prospective seller onto more attractive options.
That’s not all. If you can afford it, consider being generous with your buyer’s deposit. This lets the seller know you’re serious. It’ll also put you a step ahead of other buyers if your deposit outmatches theirs.
Lastly, don’t start asking for favors. Sellers are buyers themselves. They’re moving or they’ve already closed a deal on their new home. They’re tied up with the demands of moving to a new house, or a new city.
They don’t have time to repaint the yard fence, refurbish the kitchen, or fix the garage door.
Should You Buy or Wait?
With all that said, should you buy in a seller’s market? The South Carolina housing market is a wily beast – but it can be bested. So, yes. With the right action plan, willingness to compromise, and the backup of an experienced real estate agent, you can still come out on top.
In the end, it’s all about your buying strategy. Act fast, bid high, and be as accommodating towards your seller as you can. Whether your heart’s set on a two-bedroom flat in Lake Murray or buying a home in Columbia, it’s still a great time to buy, despite the surge.
Find Your Footing in the Seller’s Market
Buying a home is never an easy undertaking, for newcomers and veterans alike. It’s a massive financial investment – and mortgages are no joke. But don’t be dissuaded. Learning the game and knowing how to craft a winning offer puts you out in front.
Contact us for more information about the real estate services we offer.