In a seller’s market, home buyers need to be willing and able to act fast to snag the home they want. This summer, areas across the country are facing a limited number of homes for sale. Realtor.com® offers up a cheat sheet for surviving a seller’s market.
- Be on call: “If you’re only looking now and then when it’s convenient, you’re probably wasting your time,” says James Malmberg, a real estate professional in Sherman Oaks, Calif. He suggests treating house hunting like job hunting. If someone calls with a lead, follow up promptly to gauge whether it could be a good fit and don’t linger.
- Bring the paperwork: To be taken seriously, buyers would be wise to get a mortgage pre-approval letter as well as a “proof of funds” form from their bank to show they have enough to cover a down payment. They’ll be able to act quicker when they do find the right house.
- Limit the contingencies: In a seller’s market, buyers may need to drop some of the contingencies to score the house. Sellers prefer the fewest number of hurdles to closing as possible. If your buyers come in with several contingencies — such as “if” they secure financing — the sellers are more inclined to bypass their offer and take another with less hassle. Also, “don’t waste your time lowballing a seller,” advises Sean Kelley, a real estate professional with Howard Hannah in Pittsburgh, Pa. “Always put in an aggressive offer.”
- Cast a wide net: Search for homes outside prime locations if faced with limited or high-priced choices. Buyers need to carefully consider what they’re willing to compromise on. “Sometimes properties sit, even in a seller’s market, because of a problem that is scaring other buyers away,” such as some renovation work that may need to be done, Malmberg says. Those “flaws,” however, might not be a big deal to your buyers. “Finding a house this way can also cut down on the amount of competition you will face,” Malmberg adds.
Millennial home ownership levels may still be low for now, but that is expected to change in three years. Fifty-three percent of nearly 6,000 millennial renters, age 18 to 34, say they expect to buy a home, but plan to wait until after 2018, according to Apartment List’s Apartment List Renter Confidence Survey. Only 25 percent of those surveyed say they expect to buy a home in the next two years. Age and marital status will play a big role on when they jump into home ownership, the survey found. Older millennials, those age 25 to 34, say they plan to buy sooner than younger millennials, age 18 to 24: 54 percent of older millennials plan to buy within the next three years compared to only 37 percent of younger millennials. What’s more, 52 percent of married millennials plan to buy within the next three years compared to 41 percent of unmarried millennials.
Millennials earning between $30,000 and $60,000 plan to buy at a 15 percent higher rate than those making less than $30,000, and those making over $60,000 have a 25 percent higher rate, the survey shows. “Millennials are projected to be larger than the boomer generation this year, and currently only 34.6 percent of Americans under age 35 are home owners,” says Andrew Woo, data scientist at Apartment List. “While millennial home ownership rates are low today, our study found that nearly 3 out of 4 millennial renters (74%) plan to buy a home in the future. … The future housing decisions of millennials will have a major impact on the economy.
For more information on Surviving Sellers Market, a free initial consultation is your best next step. Get the information and legal answers you’re seeking by calling (516) 683-1234 today.