Buying in a Seller's Market
If you’ve thought about buying a home in the Twin Cities area, you might be a little discouraged by the state of the market. It’s definitely a seller’s market, with homes selling quickly and, based on supply and demand, for more money than we’ve seen in recent years. Home prices have risen more than 8% in Minnesota over the past year and there are fewer homes on the market.
However, there are several great reasons to buy right now, despite the competition and the seemingly imposing state of the market. Interest rates are low, the economy seems to be well and truly on the upswing, and rent is often more expensive than a mortgage payment, particularly on the Minneapolis side. Here are some tips to make buying in a seller’s market seem a little less overwhelming.
Line up your financing before you even begin to start shopping. If you find your dream home right now, you want to be able to put in a legitimate offer right away. If a seller has two similar offers on the table, one with a preapproval letter and one without, they’re naturally going to go for the surer bet. Don’t put yourself in that position. Just get the financing straightened out beforehand.
Scope Out the Inventory
How many listings are there in the neighborhood you’re planning on buying your new home? If this number is very low, you’ll likely have to step up your buying game. The best way to do this is to hire an experienced broker who stays in the know on Minneapolis/St. Paul listings at all times.
Be prepared to Wait and Watch
When inventory is as low as it is in the St. Paul/Minneapolis area, you might have to accept that the right home for you isn’t available at the very moment you begin shopping. Make a prioritized list of the things your new home must have so your real estate professional knows which properties to present to you. This may help them to catch homes before they even hit the open market to give you a better chance at getting in a favorable offer.
Consider Offering More Money
This could be more money than the asking price, more in escrow to prove to a seller that you’re serious, or even an escalation clause that shows sellers you’re willing to pay more than the next guy. When the right house comes along, seriously think about offering the sellers a boon.
Make Things as Easy as Possible for the Sellers
This could mean getting a pre-inspection so that sellers know you’re ready to deal when you make an offer. If you’re fairly certain about a property, it’s worth the risk. It also means being ready to close at the seller’s pace. Many home owners are selling right now because they want out from under a house quickly, but it’s also important to remember that they’re likely having the same trouble finding a new place that you are. Be open to whatever they need in those regards.
When all else fails, turn on the charm. Appeal to a seller’s need to see their home well-loved. Play on commonalities and work to reassure them how special the home is to you. Praise decorating decisions or a recent remodel. This is another time when having a great agent works to your advantage, as they’ll automatically be working to show a buyer that you’re deserving, and not just because you are putting in a hefty bid.