Top Tips for Buying in a Seller's Market

In a seller's market, it's important to take steps to make your offer stand out from the crowd. A lot of time and effort goes into making an offer on a house and nothing is more disheartening than having that offer get rejected. If you take steps to make your offer as attractive as possible, you can avoid the disappointment of having to stay all over again with a different house when your offer gets rejected.

Make Favorable Terms

When you're looking at a mortgage, you look for the one with the most favorable terms, whether you're looking for conventional loans or something backed by the government. Your seller is doing the exact same thing. Especially in a seller's market, they may have several offers to choose from and you can bet they're going to be weighing their options and choosing the most favorable one. A lot goes into making an attractive offer: obviously you want to get the price right, but you also want to make sure that there are a few stipulations and extra costs for the seller as you can manage.

Pay Cash

In every business, cash is king. Favorable terms can also be enhanced by making a large portion of your offer in cash. As much cash as you can get in advance, every bit will help. It's less hassle for the seller and the banks. It demonstrates that you are serious in your offer and enthusiastic about the house. It's also going to mean smaller or even nonexistent mortgage payments for you later down the line, so you might as well pay as much cash as you can in advance.

Go For Fast and Easy Closing

With certain mortgages, you can get a faster closing time, which is good both for you and for your seller. If you get pre-approved for a loan, you can usually shorten your closing time. On the other hand, if you're a first-time buyer using help from a federal program, your closing time might be longer. Ideally, you want to close in 30 days or less. Obviously, these kinds of perks won't always be possible, but it's something worth asking your loan officer about, as it can push your offer to the top of the pile.

Know Your Budget

The biggest thing you can do to expedite the process is to know your budget inside and out. How much can you pay upfront? How much can you afford to pay afterwards? Ask about big-ticket-repairs like the roof, the windows, the water heater, air conditioning and heating. If you know that you're going to need a new roof and new windows before you make your offer, then you can budget for that in advance and you won't get a nasty surprise when it comes time for the home inspection. That way, you can make the best offer right off the bat and you won't have to leave caveats to renegotiate after the home inspection. Leave yourself a modest cushion, just in case something unexpected comes up, but do everything you can to avoid bothering the seller to change the price after they've accepted your offer.

Use the Personal Touch

Especially if you are buying someone's personal home or their family's home, rather than an investment opportunity, a personal touch can make a world of difference. You might want to include an offer letter, explaining why you chose their house, what you love about it and what you plan to do with it. Genuine, heartfelt sincerity can make a huge difference to someone selling their childhood home.

When you're looking for a new home, it just doesn't make sense to leave anything to change. If you do everything in your power to make your offer as good as possible, then you can rest easy knowing that you did everything you could. In a seller's market, there are no guarantees for buyers, but at least you can be sure you did everything in your power.