When a market is hot, finding and buying a home can feel like an uphill battle. In a seller’s market, homes go quickly. They can be on the market one day and gone the next. And on top of the challenge of finding a home, most homes (especially the desirable ones) have multiple offers, making it harder to get into the home of your dreams.
But buying a home in a hot market isn’t impossible! You just have to approach it strategically and stack the deck in your favor to find – and successfully buy – the right home for you and your family.
Here are four tips for buying a home in a hot market that will put you a step ahead of the home-buying competition:
When faced with multiple offers, sellers are going to go with the offer that’s the most attractive, both in offer amount and the actual terms of the offer. So if you want to stand out from other potential homebuyers and make an impact on the sellers, you need to make your offer as attractive as possible.
The first thing you can do to make your offer attractive is to put more money down towards the house. Cash offers are always the most attractive, but that’s unrealistic for most people. So if you can offer a larger down payment than the standard 20%, that will immediately make your offer stand out.
If you don’t have extra cash, there are other ways to make your offer more attractive to sellers. You can offer a short inspection period and agree to take the property as is, which will sweeten the deal for sellers (just make sure you know what you’re getting into; obviously, any large repairs discovered during inspection can add a significant cost to owning the property). Or, if the owners want to stay in the house longer (for example, to finish out the school year), you can offer to rent the home back to them after purchase and delay your move in.
Anything you can do to make your offer more attractive to sellers will up your chances of landing a home in a hot market.
In a hot market, the sellers are the ones holding the cards. And if you want to find a home, you need to be willing to be flexible.
Chances are, when you find a property, there are going to be things about it that don’t fit your image of your “perfect” home. But if you wait too long on a property or ask for too much from the sellers in terms of repairs or changes, you risk losing out to other people who are ready to make a move.
Don’t budge on your non-negotiables; you want to be happy with your home purchase and not feel like you moved too quickly out of fear you wouldn’t find another property in such a competitive market. But don’t let a great home slip through your fingers because you aren’t willing to be flexible in your wants and needs in a home. Because in a hot market if you’re not willing to be flexible, someone else will be.
While you always want to get the best deal possible on your home purchase, a hot market isn’t the time to go in with an ultra conservative offer. In sellers markets, houses routinely go for well above asking price. And while you don’t necessarily have to make an offer that’s above asking price, if you want to land a home in a hot market, you need to be aggressive.
If you find a property you love, talk to your real estate agent to come up with a strategy to make your offer aggressive and competitive. Look at the recent sales in the neighborhood to get an idea of what homes are selling for and make sure your offer is in line with the recent comps. Make your offer competitive, but don’t commit to more than you can comfortably pay.
It seems like a minor detail, but when you’re looking to buy in a hot market, is a good idea to write a personal note to the sellers.
When faced with similar offers, many sellers end up following their emotions and going with the potential buyer they most want to sell to. And by writing a personal, sincere letter that introduces yourself and your family and lets the sellers know why you want to purchase their home, you can differentiate yourself from other potential buyers, appeal to their emotional side, and land the home.
Buying in a hot market isn’t easy, but it’s possible. And with these tips, you’ll put yourself a step ahead of the competition and get yourself a few steps closer to buying your home.