If you are a home buyer navigating a fast-paced seller's market, you might feel overwhelmed. With limited inventory and fierce competition it’s easy to find yourself engaged in bidding wars ending in heartbreak. This post is for you dear buyers — with strategies, flexibility, and professional guidance you can turn the odds in your favor and secure your just-right home.
Tip #1: Get Your Finances in Order
Before you even start your home search, you need to get pre-approved for a mortgage. This gives you a clear understanding of your budget and what you can afford, and signals to sellers you're a serious buyer. It strengthens your negotiating position and allows you to act quickly when the perfect property comes along. Keep in mind, most sellers won’t even look at offers without a lender’s pre-approval.
If you are paying in cash, be prepared to provide proof of funds in lieu of a pre-approval. A bank statement or letter from your banker showing the full amount should suffice.
When representing sellers, I typically reach out to the buyer’s lender or banker for confirmation of finances before my clients sign anything. Assume your seller’s agent will do the same.
Tip #2: Work with an Experienced Real Estate Agent
Partnering with a seasoned real estate agent can be crucial in a seller’s market. Your agent should have insider knowledge of the local market, an understanding of current trends in the region, and negotiation skills to help you secure the best deal. Lean on their expertise to navigate a competitive landscape and present an offer with winning price and terms.
A knowledgeable agent will also have an in-depth knowledge of contracts to help you understand the plethora of paperwork needed for a successful transaction. Read all forms before signing anything, and ask your agent when in doubt. All questions are good ones!
Tip #3: Be Prepared to Act Fast
In a competitive market, time is of the essence. When you find a property that checks all the boxes, don't wait – schedule a showing as soon as possible. When you’re ready to act, your agent should be connecting with that seller’s agent immediately to establish a relationship, learn seller preferences and gauge the competition. In a multiple offer situation there typically will be an offer deadline. But be aware, ultimately it’s the sellers’ decision — they may be pleased enough with the first offer to just sign it and move on.
Tip #4: Make a Strong and Compelling Offer
If you’re facing competition, put your best foot forward with price and terms. Consider terms favorable to the sellers such as a preferred closing date, appraisal gap coverage or even an inspection contingency waiver, if you're comfortable doing so. And of course, price matters. Sellers will be calculating their net proceeds, which means offer price minus any concessions you may ask for, including paying your realtor fees. Be sure to check in with your lender to stay within your budget and confirm what they can accomplish within the offer timeline.
A Word on “love letters” to the seller
Buyers often ask if they should include a letter to the seller with their offer. My answer is “it depends”. I recommend either avoiding the letter altogether, or including only what you love about the home — no personal information or photos. Getting too personal or including photos could set up the seller for a potential fair housing violation. For example, sellers could unconsciously (or consciously) choose a buyer based on race, religion, familial status, etc. Some sellers explicitly ask for no letters often for this reason. Best to consult with your agent before you start to compose.
Tip #5: Stay Flexible and Keep an Open Mind
Flexibility is key in a competitive market. Be prepared to compromise on some preferences in order to secure your must-haves. Also, keep an open mind during your search – you may be surprised by properties that initially fall outside your criteria but end up being the perfect fit. Finally, be realistic about price. If you continue getting outbid, and feel you can’t complete, start looking at lower priced homes. This will give you wiggle room to bump up your offer if need be.
Heidi Swanson is a Realtor® based in St. Paul, Minnesota. She writes to inform buyers and sellers on variety of topics including market conditions, tips for selling and buying, homeownership trends, and more. Reach her at heidi@lyndenrealty.com or 651-503-1540.
This content was created by a human writer and has not been generated by AI.