The Colorado market has been deemed a seller’s market. This has buyers, especially new buyers, feeling as if they are out of luck to purchase a home in this fast-paced, HOT market!
How to Buy a Home in a Seller’s Market
Historically low interest rates, rising rental prices, and job growth are causing more people to look towards home ownership. The biggest challenge as a buyer in a seller’s market is the lack of inventory available on the market. We have been experiencing this for some time in the Colorado market, but buyers will feel the heat of the competition even more as we approach spring.
Get pre-approved early
The very first thing you want to do when you are considering purchasing a home is to reach out to a lender and get pre-approved. If you don't know where to start with reaching out to a lender, look online for reviews or talk to a local agent. Each lender is different. Some lenders are specially qualified in loan assistance programs that can help you save money. An example of this would be Colorado's down assistance program CHFA that as of March 1st will help cover 4% of your down-payment.
Prepare for multiple offers on the home you want
Everyone wants the best price possible when purchasing a home. When people see the listing price of a home, naturally we wonder what can we really get this house for. Offering lower than asking price can be a reasonable strategy in some situations, but not all. In this market where we have shortages of inventory, buyers often are competing against multiple offers on a home. Competition is fierce; prepare yourself for a strategy if the home you fell in love with receives multiple offers and you need to compete.
Educate yourself and prepare to make a quick decision
Buying a home is a complex decision and is not something that should be taken lightly. When you are in a seller’s market, over-analyzing and dragging your feet on writing an offer on a property can be the difference between having your offer on the table first and being next in line to buy. Once you understand the market value of homes meeting your criteria and you find the home that is right for you, be ready and comfortable making a quicker decision in a seller’s market.
Overall, work with an agent
Buying in a seller’s market without the help of a buyer’s agent is difficult. In a seller’s market, you need to find your own buyer’s agent that is truly working on your behalf and applying their expertise in any way they can. If you have a great buyer’s agent, they will understand both parties to know what that specific 'something' will make your offer more appealing to the sellers of the home among your competition and multiple offers.
Coming Soon Listings
Working with a well-known agent that has a record of high sales volume will give you access to their coming soon listings. Agents that are at the top of their game are often in contact with several potential sellers getting a few things in order before launching their home on the market. Working with these agents will give you access to these new listings the minute they are on the market that you may otherwise be too late to see.
Agents have access to homes that have just been listed. Working with an agent will give you access to these homes so that you are quick to the trigger when setting up a showing and potentially having the first offer on the table.
Working with a veteran agent will give you extra arsenal to your offer. This extra something could be an escalation clause that lays out how much more you are willing to pay extra over competing offers. Great agents will have tricks up their sleeves that will highlight your offer among the competition.
Beyond making your offer stand out above another, your agent will be able to work out what will be the best outcome for you as their client. There may be additional ways in which they can help you such as cost deferrals and strict inspection negotiation to guarantee you are making a smart deal.
Agents Know What to Look For
Working with an agent that has an established business for some time is beneficial when sellers have the advantage. Agents know how to spot deficiencies in a house or property that you may not have noticed on your own up front. They can help you to quickly decipher if a home you are looking should be skipped and on to the next.
Beyond knowing what to look for inside a home, experienced agents know the ins and outs of the market. They will be able to direct you towards neighborhoods and communities that will not only satisfy your wants and needs but recommend homes in areas that are more likely to appreciate over time.