By Shelley Sakala
We are living in interesting times… Is this a buyer’s market or a seller’s market? It depends on your price point. What we are experiencing in Phoenix are several micro-markets driven by price. If your price range is $400,000+, the selection is good right now – but if you’re looking for a more budget-conscious house it’s slim pickings. Inventory priced between $100,000-$200,000 is extremely limited. This creates competition for available properties, driving up prices toward the high end of the low end. A house that might normally list at $195,000 is now selling for $210,000, which is above budget for some buyers. This, of course, leaves even fewer homes for buyers in the lower price range.
When demand exceeds supply, it’s important for buyers to be savvy and strategic as they shop. The pie is smaller, and everyone wants their slice. And while money talks, the highest bidder doesn’t always get the house. Here are 5 ways to increase your chances of landing the home you want when competition is fierce:
- Show up ready. Get yourself pre-qualified for a home loan. This lets the seller know you’re not only serious about buying a home, but you’ve got the means to make it happen with the least possible delay. No seller wants to go through the entire selling process only to find out in the 11th hour that the seller didn’t qualify for a loan.
- Be serious about your offer. If a house is listed at $200,000 and you offer $100,000 “just to see what happens,” you won’t be taken seriously and the seller will move on to the next buyer. Don’t let your desire for a good deal get in the way of a fair deal.
- No new loans, cars, or credit cards. Buyers who were otherwise pre-qualified for a home loan can be denied their loans because they made a huge purchase or opened up a new line of credit before closing on their house (a red flag for lenders). Even if you have the means to afford it, hold off on making significant financial transactions until after your closing date.
- Be realistic with your expectations. There’s a big difference between a hole in the roof and a carpet color you don’t like. Presenting the seller with a laundry list of things to “fix” can sabotage a deal. It’s fine to create a list of reasonable dealbreakers, but don’t get carried away. If it (or you) become more trouble than it’s worth, you risk losing the house to another buyer.
- Work with an experienced Realtor. When it comes to buying & selling houses, Realtors know more than the average person. They have better resources, as well as access to more information. With hundreds of thousands of dollars on the line, you owe it to yourself to work with someone who does this for a living – not as a hobby.
Shelley Sakala is a Realtor with HomeSmart Elite and a resident of North Phoenix.