Buying a House in a Low-Inventory Market
Tight supply of available homes for sale has been the story across the country for a number of years now and nowhere is that more evident than here in the Valley. The simple laws of supply and demand have left many buyers disappointed and frustrated.
After the crash of 2008, first-time homebuyers in particular were less able, or at least less willing, to take on the large debt of a mortgage. With fewer people buying back then, homebuilders had no choice but to cut back on the number of homes they build because they did not want to be saddled with vacant properties. This has been a big contributor to the scarcity buyers are experiencing now.
Today, demand has surged, but inventory has not been able to keep up. Whether you’re a first-time homebuyer or you’re looking for your next home, here are some tips for finding a home when inventory is low.
Focus on homes that have grown “stale”
For most buyers searching online, the first inclination is to see what’s new on the market. But that can be counterproductive when inventories are tight. Why? Because every other buyer and their agent are doing that exact same thing.
If you’ve been looking for awhile, you may wonder what good it does to look at old listings—you’ve already seen everything on the market, right? Yes and no. The trick here is to adjust your filters so you are including homes that are just beyond your price range. Homes that still haven’t sold in a seller’s market are likely to be priced too high compared with current market value for the neighborhood.
Putting in a low offer could be an option. If not, keep these properties on your watch list, as their price may eventually go down. This is another one of those instances where, as your real estate agent, I can provide you with advice on whether a low offer is likely to get attention.
Consider investing some sweat equity
Most buyers want a move-in ready home. It takes some vision to see a home not for what it is, but for what it can be, once lovingly cared for and restored to its former glory.
If you would consider a fixer-upper, you might also consider bringing a home renovation expert along with you on the showing, if possible. This provides you with a professional’s opinion and will also give you at least a ballpark figure of what it might cost to renovate.
Be willing to wait
Buying a home is an exciting time, whether it’s your first home or your sixth. With inventories so tight, you could start to feel desperate for that next home. Don’t let those feelings get in the way of sound judgement or you will suffer buyer’s remorse. Unless you absolutely have to move on a specific timeline, settle in and be patient until the right home comes on the market.
But, be ready to act
Staying patient to avoid a bad impulse purchase doesn’t mean you aren’t ready to jump at the right opportunity. One of the most helpful things you can do to get your offer accepted is to get it in as soon as possible when the right property comes along. It’s a simple fix, but one a lot of buyers don’t take seriously enough.
Do all you can to make yourself available as soon as possible when a property comes available, even if it means squeezing a showing in over the lunch hour or after work when you really just want to get home and get dinner started.
Try to accommodate the seller
Are the sellers unable to meet your proposed closing date? Offer to move it back, even if it means you incur some cost or inconvenience on your end. Another option is to rent the property back to the former owners if they request that option, but be sure you understand the legalities and liabilities of doing so.
Another step you can take that could move the odds in your favor is to avoid a tendency to nitpick on repairs or specify other actions to be taken. Ask yourself whether anything you ask for is worth losing the deal over.
Expect to pay more
Having to increase your budget is never a happy conclusion to draw. But, with homes moving on and off the market at a rapid pace, it may be worth spending just a bit more in order to get what you want. As your real estate agent, I can help you come up with a competitive, strong offer.
Still not sure how you’re going to find the right house? Give me a call, email or text. At The Offer Company we have programs specifically designed to help you get into your next home.