I’m sharing my five best tips for how to buy a home in a seller’s market.
Today I’m going to share five tips for how to buy a home in a seller’s market. November 1 had the lowest number of homes for sale in the greater Palm Springs area in recent history. At 3.8 months’ worth of sales, we remain in a firm seller’s market throughout the Coachella Valley. So how do buyers compete?
1. Be prepared ahead of time. Do the leg work up front, and have your finances in order so you can write an offer on a property swiftly. If you’re planning to get financing, speak to a lender ahead of time and have your pre-approval in hand. If you’re paying cash, then the seller will ask you to present a proof of funds letter verifying that you have the money to close.
2. Know what you want. Create a list of must-haves versus nice-to-haves. If you’re purchasing a property with a partner or spouse, you both must get on the same page early. Have a predetermined set of priorities that you’ve agreed upon so that you can determine which homes fit your needs the best so you can move as promptly as possible.
3. Know the market and move quickly. It’s crucial to have a dependable advisor—an agent on your side who can help educate you on what’s happening in the particular neighborhoods in which you’re interested. Look at the list-to-sale-price ratios in terms of what homes are selling for and how rapidly they’re moving off the market so that when your dream home becomes available, you’ll know precisely how you’re going to move, and you can move quickly. Chances are, if you’re having a “wow” experience looking at the house, you’re likely not the only one. Your speed in writing an offer may be the thing that secures your dream home.
4. Be prepared to compete. Submit your highest offer early. If you’ve studied the market and the house is priced correctly, go in high and go in early. If you lowball a well-priced home, it may crush your chances of working with the seller at all. Another idea is to determine if there’s a problem you can solve for the seller. For instance, if the seller needs to find a replacement home, consider closing early and allowing them to stay in the home for minimal rent until they find another home.
In California, all homes are sold as is with the buyer’s right of due diligence. So, don’t ask for trivial issues to be resolved after the home inspection or the seller may decide to sell to someone else.
Don’t discount properties that have been on the market for a while. Maybe they were initially overpriced and now the seller needs to sell because it’s been on the market for a while. There may be some opportunity. Properties generally get the most attention in the first 30 days. If they haven’t sold in that time or haven’t had some sort of price alteration, then they tend to be stigmatized. It doesn’t mean the seller doesn’t want to sell. Consider putting in a reasonable offer to get a dialogue going with the seller.