Some homes are selling above list price before anyone realises they’re for sale.
So how can you purchase that dream home without being frustrated by the highly competitive market?
Here are a few tips for both buyers and agents to keep in mind while trying to keep up with the current fast paced real estate market.
Resources vs. Research
Doing research to understand how to traverse the market, especially in these competitive times, is commendable, but too much research can put you behind.
Sale prices from six months ago tell you very little about the market right now, especially in a hot market where houses are selling fast. Sale volumes can tell you more about the market you are considering.
The people you hire to assist with the purchase are the experts you should turn to for information.
Your agent, your inspectors and, yes, even your lender have specific knowledge in real estate transactions that could save you time and money. Your agent is actually your biggest asset because they have their thumb on the market and know how to counsel you.
Newbies vs. Experienced
New buyers tend to have more questions relating to the price of the house.
“Isn’t that price a bit high compared to other houses here?”
“What will the resale value be?”
These buyers are more concerned about paying more than what ‘fair market value’ of the home seems to be and less about actually buying the home.
These are the ones who have done more research than they needed to do yet do not understand the current market.
Experienced buyers understand the process more and have played the search-offer-rejected game enough.
They recognise the role agents play in a real estate negotiation, and they speak directly to them.
“What does the seller want?”
“What do we need to do to get into this home?”
These are the important questions that will put them into a new home. Usually, they have already been pre-approved for a mortgage, which is also an advantage in a fast-paced market.
Buyer vs. Agent
You may think that the easiest way to save money on a home purchase is to deal with one agent, but you are forgetting that the listing agent’s loyalty is to the seller.
The agent may ‘double end’ the deal, but that is so he can receive a larger paycheck at the end of the sale. Also, in a highly competitive real estate market, agents are less likely to want to represent a buyer, even for a bigger commission.
There are more advantages to hiring a buyers agent to represent your interests throughout the process.
Buyers agents have worked with many listing agents and often are quite familiar with how each listing agent operates.
If you have an agent that is personable, they either have built a relationship with the listing agent already or can build one quickly. Standard business practice is that people like to deal with people they like.
Ultimately, the seller has the final say, but the agent can use their skills to negotiate a more appealing deal.
Price Range vs. Sales Price
If you are looking to buy in a hot market, you should consult your agent immediately to make sure your price range doesn’t eliminate you.
They have ways of determining a current market value that is more accurate than the recent sale prices, and they can advise you accordingly.
Ideal vs. Reality
The ideal real estate transaction is: find a home, make an offer, close the deal.
However, the reality is that there will be issues. It’s actually expected.
While agents keep tossing the phrase “smooth transaction” around, know that their definition is based on whether the house sells without major repairs paid by the seller.
Your agent is the best source for advice to help you navigate through this trying time without losing hope.
There are so many tips about how to buy a home in a highly competitive market, but the key insights for you are: understand your limitations, be flexible and make your agent your best friend.
Agents contain a wealth of information that is at your disposal. If you are to survive and thrive as a buyer in a hot real estate market, having an agent you can trust is your best investment.
