We are currently in a seller’s market here in Halifax. You have likely heard this a lot lately if you’re following real estate trends or have any interest in buying or selling. But, what does it really mean? Furthermore, as a potential buyer in this market, what does it mean for you?
According to Investopedia, “A seller’s market is a market condition characterized by a shortage of goods available for sale, resulting in pricing power for the seller. A seller’s market is a term commonly applied to the property market when low supply meets high demand.”
Given our current situation, it isn’t all that surprising that we are seeing more buyers than sellers in the market. With the future uncertain, many are hesitant to make any major moves right now when it comes to listing their homes. However, there are still people moving into the area creating a demand.
So what does it mean to be a buyer in a seller’s market?
In a seller’s market, prices tend to be higher because of increased demand and prices tend to be higher. Houses sell quickly and often over asking due to multiple offers coming in. As a buyer, that can be daunting. There are a few things you can do to better your chances of getting the home you want at a price point you can afford.
Getting approved for a mortgage before you start looking for homes will do a few things. It will allow you to be looking for homes within a price range you know you can afford. It will also make the transaction move much quicker once the process begins. Once an offer is accepted, the ability to have your financing approved quickly is an asset.
Put in a strong offer
In a seller’s market, coming in under asking isn’t an option. There will be multiple offers, so making yours as attractive as possible will help you to stand out. That doesn’t necessarily mean you have to come in way over asking. Instead, you could consider offering a larger deposit, this shows the seller you are serious about your commitment.
Be Aggressive yet Agreeable
If you’re interested in a property, don’t hesitate! In this type of market, even a matter of hours can make the difference between an accepted and rejected offer! Having all of your items in order certainly helps to facilitate this. This may mean asking for fewer compromises to make your offer as easy as possible for the seller to accept. Asking for the seller to wait until your existing property sells may not be an option. Similarly, asking for a longer closing or lots of inclusions may have a negative impact.
As mentioned above, trying to eliminate as many hurdles to the selling process as possible will be key. This may look like shortening or extending the closing period to meet their needs. It may mean being available at any time of the day to discuss offer details and deal with counter offers. It might mean making exceptions or compromises you may not normally have to make. If you’re not willing to make those types of considerations, buying during a seller’s market, may not be for you.
Lastly, as a buyer in a seller’s market, you may have some luck with making a personal appeal to the seller. Working through your realtor, consider drafting a personal letter to the seller laying down why you’re drawn to their property. Personal connections can make the difference between two similar offers on paper.
What happens if you find yourself in a bidding war?
If you find yourself in a bidding war, finding the trigger point(s) for the seller will be key. Through your realtor, try to find out if they have conditions that will make the sale easier. Perhaps they require a unique closing period, aren’t prepared to deal with conditions or are motivated by a larger deposit amount. If you’re really set on the property, any advantage you can find to make your offer stand out should be considered. Try to keep your hand close to your chest to both the seller and any other buyers you may be bidding with. Your realtor should be able to help you navigate a bidding war to your best advantage.
Have additional questions about buying during this time? We’re here to help!