Buying in a Seller’s Market: Who’s the Winner?

Editor’s Note: This was originally published on RISMedia’s blog, Housecall. See what else is cookin’ now at blog.rismedia.com:

The change of season often brings a shift in real estate market conditions. Inventory tends to decline and buyers may become more aggressive in their home search. This change can affect real estate transactions in a variety of ways.

Here’s what you need to know about buying or selling a home in a seller’s market:

Time is valuable.
Buyers don’t have as many options as during the peak purchasing months. This means more competition because there aren’t as many homes to look at in their price points. Buyers need to know what they want. If they absolutely need three bedrooms, then they’ll have to ignore that two-bedroom house or risk losing out on better opportunities.

They will also need to be prepared to make offers quickly. Buyers without a preapproval will not be considered and will likely miss out on highest and best deadlines by the time they obtain one. On the other hand, sellers will have an easier time selling their home. If in good condition, their home will likely be the cream of the crop during low-inventory months.

Offers are aggressive.
In a seller’s market, buyers will often have to deal with multiple-offer situations. If they don’t bring their best offer to the table, they will most likely lose out. Sellers can also prioritize stronger terms. They may decide to go with a lower offer if the buyer can close faster or is putting more money down.

A combination of the highest purchase price with a 20 percent down payment and a reliable lender is usually the winner. Of course, you can’t forget that cash is king. An all-cash offer will likely trump any others on the table.

Negotiations are a game changer.
Unfortunately, buyers may lose some negotiating power in a seller’s market. Unless the seller is incredibly motivated to get rid of their property, they may take advantage by refusing to take care of some inspection items. Buyers should be wary of asking for too much, as even big-ticket items may not be taken care of. Unless something is a safety or health hazard, it shouldn’t even be brought up.

Sellers may also decide to be more selective about what they are leaving with the house. They may decide not to include appliances such as a refrigerator, dishwasher or washer and dryer.

Even small things like tone in a negotiation email should be taken into consideration. Alienating the sellers this early in the game can force them to go with a back-up offer.

Real estate agents are essential.
Even though a seller’s market clearly tips the scale in one direction, buyers are more likely to lose out if they are not working with an experienced agent. Likewise, sellers may not even be aware of their advantage without the help of a real estate professional. Agents will advocate for their clients—whether they are buyers or sellers—by helping them get as much as possible during sale price and inspection negotiations.

Things that may not seem significant—such as getting all of the paperwork submitted correctly, sending emails to the opposing agent and doing due diligence on the property—can make a huge difference in a seller’s market.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

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Neighborhood Spotlight: Waxhaw’s Barrington

Let’s check in with the fantastic new neighborhood of Barrington located in Waxhaw, North Carolina near South Charlotte in Union County. This beautiful new construction community posts a junior Olympic pool including a splash area, kiddie pool and open-air cabana. The neighborhood also has plenty of walking trails as well as a playground, making it a great place for young families.

There are currently six homes on the market in Barrington representing 3.1 months of inventory, which is lower than Waxhaw’s inventory as a whole, which is currently at 5.5 months. While Waxhaw has a fairly balanced market, Barrington’s inventory seems to favor the sellers.

However, the average price per square foot has gone down over the past year from approximately $120 per square foot to approximately $115 per square foot, which bodes well for buyers. Furthermore, the average sales price has remained fairly steady over the last 12 months.

Homes currently on the market range in size from just over 2800 square feet to just under 4100square feet and range in price from $349,900 to $469,900. Many of these homes also feature premium finishes, including hardwood floors, stainless steel appliances, granite or quartz countertops, and more.

This is a great family neighborhood in a sought-after school district featuring floor plans that cater to families and beyond.

If you want to learn more about Barrington, give us a call at (704) 525-4045. You can also view current listings on our website here.