South Florida is currently in a Seller’s Market which means that inventory is low, home prices tend to increase and attempting to purchase a house in this type of market can make the already complex process of buying a home even more overwhelming.
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Here are some tips to help buyers successfully get through the buying process in a tight inventory market with as little stress and difficulty as possible.
1. Determine and stick to a budget
Before beginning the house hunting process, prospective homebuyers should receive preapproval from one or more lenders to verify the amount of money they are qualified to borrow. Then, after taking into account additional costs of ownership such as taxes, utilities and insurance, buyers should determine a final budget they can comfortably afford. When listings are scarce, bidding wars can drive up prices, so buyers must be prepared to walk away if the asking price surpasses their budget.
2. Identify desired neighborhoods and home wants versus needs
When housing inventory is tight, buyers may need to compromise on what they believe they want from a home. Certain wants, such as stainless appliances or hardwood floors, can be added later. However, if a buyer wants to be in a specific school district or have a decent sized backyard, those cannot be addressed later and must be taken into account during the house hunting process.
3. Be ready to make a decision quickly
In a seller’s market, homes rarely stay on the market long, so when a house that is in their budget and checks off all of their needs come along, buyers should not hesitate. Buyers should be ready to submit an offer quickly, or they may risk missing out on the home altogether.
4. Bid competitively and limit contingencies
It is tempting to submit a low offer as a starting bid, but in a seller’s market buyers need to put forward their highest offer from the very beginning or they are likely to lose out on the home. It is also important to remember that in multiple bidding situations it is not always the highest offer that is most attractive to the seller but the one with the fewest contingencies. Removing restrictions related to the sale of a current home and being flexible with things like the move-in date can make a bid stand out to a seller.
5. Work with a Realtor®
All real estate is local, so it is important to work with an agent who is familiar with the areas and neighborhoods homebuyers are considering. Realtors® are the most trusted resource for real estate information and have unparalleled knowledge of their communities; they can give buyers the competitive advantage needed in a tight market.
