What exactly is a “seller’s market”? This generally refers to a period of time when sellers have the upper hand in negotiating the sale of their home – seemingly able to name their price and terms to the detriment of buyers.
How does this situation occur? Usually by high buyer demand, favorable interest rates for borrowing and limited inventory. The residential resale market is cyclical – in other words, this will pass. But how long will it last? Maybe the buyer can wait it out, but it may continue throughout the time the buyer REALLY needs to buy.
What should buyers do in a seller’s market?
Be prepared to:
1) Find and work with an excellent real estate agent. That professional has dedicated their time and expertise. Buyers owe loyalty to their agent. No one works for free, and while their commission comes from the seller’s side of the transaction, the agent does not get paid when buyers walk into an open house and ask the listing agent to make an offer to”get a better deal”. This is a myth that I will blog about later.
2) Be pre-approved and know their price limit. Lenders will be happy to work with buyers to determine their limits and closing costs.
3) Be realistic. Make your best offer and don’t play games with price and terms.