For the last six years, the real estate industry has mostly favored buyers. After all, there was a surplus of homes for sale, so buyers could practically name their price. And interest rates were exceptionally low, there was an incentive to get them to buy.
But over the last few months, the tides have changed. The interest rates are still low, but it can be extremely difficult to find a home within your price range!
Most of the distressed properties that flooded the market with inventory have since been purchased, so now there's a shortage of homes for sale. In fact, the pickings haven't been this slim in 7 years, with listed inventory currently 25.3% lower than it was a year ago. Nationwide, there's only a 4.2 month supply of homes for sale. That means, at the current sales rate, all of the homes currently listed would sell in the next 4 months! Economists consider a 6 month supply to be normal, so clearly things have changed dramatically from just a few years ago!
Inventories should increase during the spring months, since most residential real estate transactions take place between March and July. But even with the added boost, experts at the National Association of Realtors still expect there to be a shortage of homes for sale for the rest of the year.
So, now that home buying has become a seller's market, what can you do as a buyer to find the perfect home for you and your family?
Here are some helpful tips.
First, get pre-approved for a mortgage before you start looking for a home. This lets the seller know that you're serious about buying their home, and it establishes a price range than you can afford. If you don't think you can get pre-approved, then you aren't ready to buy a home! Once your finances are in order, meet with a lender to determine how large of a loan you qualify for. Just because you're approved for a certain amount of money doesn't mean you have to make an offer that high. It just gives you and the seller reassurance that there won't be any hitches in the purchase process should you decide to buy their home.
Next, don't compromise just because you become frustrated with how long it's taking to find the perfect home. In a seller's market, chances are that you're going to encounter a situation where you might be one of multiple bidders on the same home, or the seller may not be flexible on their price. You need to be honest with yourself, and determine if the home you're looking at truly meets your needs. If so, then perhaps you should be more willing to negotiate, but if it's not what you had in mind, keep looking until you do find the right home. Once you do find the perfect place, keep in mind that sometimes it's not the buyer with the highest monetary offer who ends up getting the home. Often times, sellers want someone who is going to be flexible with move-in dates, closing costs, repairs, etc. Also, it doesn't hurt to write a “Dear Seller” letter telling the homeowner why you fell in love with their home.
Finally, don't worry if you don't find your dream home during the spring selling season. Yes, it's true that there are more properties listed during these months than any other time of year, but the fact of the matter is that homeowners list properties year-round. So, check out all of the homes that are available right now, and if you still can't find anything that fits your needs, keep looking until you do.
Hopefully with these tips, you'll be able to locate your dream home and put in a winning offer!
This article is brought to you exclusively by RealtyPin.com