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Let’s take a look at what it means to be a buyer in a seller’s market, and some tips designed to facilitate the process, where possible.
Under any market conditions, buyers can expect to face unique factors that will influence the buying process. For first-time buyers in particular, it is imperative that buyers begin their search with a clear understanding of the variables they are likely to encounter – market conditions included.
What recipe of factors create market conditions conducive to a seller’s market, anyways?
Essentially, the biggest influencing factor in steering the market in favour of sellers has to do with supply. A housing shortage or a surplus in potential buyers (than there are homes available) will translate to a seller’s market. With the opposite being reflective of conditions for a buyer’s market.
A seller’s market means that homes are generally going to sell faster, with a higher potential for multiple offers for purchase, and as a result, higher sale prices. When looking at comparable properties to those of interest during your home search, you’ll notice that those homes who sold above asking, most likely did so during market conditions aligned with a seller’s market.
But does this mean buyers should avoid going forward with their search? Not at all! This just means that buyers may need to adapt their approach. First of all, you’ve heard this before and it’s worth repeating, but market conditions are ever-changing, and the ebb and flow is constant.
Things balance out, and if you’re ready to buy now, then the right sales representative, a realistic budget and a readiness to act quickly will go a long way to ensuring the process is as pain-free as possible.
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As with anything, do your research. You will want to be aware of current market trends, and ensure you’ve done your homework in choosing the right real estate agent to help you in this process. You’ll also be able to rely on their expertise to prepare you for any obstacles ahead and manage them should they arise.
Doing your research will also help you in determining if a property’s price reasonably reflects its current value, as well as giving you more information to use in comparing neighbourhoods of interest.
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While some room for financial flexibility is great, if that’s an option for you – buyers, especially first-time home buyers, will have to establish a clear budget before starting their search.
Establishing your budget considerations early on, including any room for flexibility, if the need arises, will also be reinforced once you go through the mortgage pre-approval process. This will give buyers a clear understanding of what they can afford, how much they can borrow, and ultimately, what budget bracket they fit into for their home search.
In a seller’s market, it’s imperative that serious buyers are prepared to act fast on properties of interest. Having a clear idea of what it is you want will not only make your dream home easier to find, but will also ensure confidence when acting on houses of interest – or to that end, knowing when a property is not “the one”.
Beyond the purchase price, your offer consists of other variables such as whether or not you are looking for a short or long closing, as well as any conditional terms making part of the agreement.
In a market where time is of the essence, coming in with a strong offer minimizes the potential for other interested buyers to present their own offers and create a bidding war situation. And if a property of interest does go into this multiple offer scenario, having a strong offer on the table will put you in the best position from the start. To a seller, a strong offer right off the bat is demonstrative of a buyer who is serious about the property, and looking to avoid unnecessary back-and-forth.
Not surprisingly, sellers will be most interested in offers with the quickest closing and least conditions. If this is feasible for you – great! – but never compromise on contractual terms and other particulars of the offer negotiation process unless you are certain they work on your end as well. This is another area where having an experienced realtor by your side will ensure clarity and expert guidance at each step.
In a seller’s market, understanding the conditions in your position as a buyer will allow you to adapt and enter your search with a level of preparedness.
Just a few ways to ensure you are prepared for acting as a buyer in a seller’s market:
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Under any market conditions, one of the most important choices buyers and sellers can make is selecting a local realtor with the expertise to help you navigate the buying and/or selling process from start to finish. The right agent will be able to offer you resources, insight and expert guidance at every step.
When you choose a local agent who best aligns with your needs, you are effectively minimizing the workload and unnecessary added stress on your end. You are also equipping yourself with the professional representation necessary to best manage all the steps and variables involved in real estate transactions.
Save yourself headaches, streamline the process and avoid added issues down the road by choosing the right sales representative from the start.
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