Buying a home has never been more difficult. Inventory is way down, prices are way up, and competition is fierce. Below are some considerations and tried & true strategies to help buyers succeed in a seller’s market.
Hunker down: First thing’s first: It can take a while to find the right home under any market conditions. Give yourself time. Find a way to secure a living situation that affords you all the time you need to purchase a new home. With the security of a flexible living situation during your search, you’ll avoid feeling pressured into a rush decision.
Start with the right team: The terms of your offer aren’t the only thing that matters to a seller and listing broker. The broker representing you and the lender you use to finance your purchase may strengthen (or weaken) your offer. Working with professionals from a reputable, local firm often boosts the reception of your offer. Sellers need to know that your team is competent and responsive and that they’ll work diligently to close your purchase on time, without unnecessary drama. The best agents and lenders will be honest and transparent with you, even with bad news, to help to craft an offer that gives you the best results, without undue risk.
Search for homes safely within budget: Homes in desirable areas of Seattle, Mercer Island and the Eastside are almost all selling above their list price, so if you have a budget of $750,000, focus your search on homes listed below $700,000. This gives you room to increase your offer and compete, without exceeding your budget.
Act quickly: In a hot seller’s market, there’s no time to doddle. Practically all listings are setting scheduled offer review dates (5-6 days after debut) but if you spot one that is NOT, there’s a decent chance that the seller might accept the first good offer they receive. It’s obviously a little scary to make big decisions and commit to buying a property in one day but avoiding a bidding war on a desirable home is extremely valuable. If you set up saved searches on Redfin, you can request immediate notifications (by email or text) when new listings are activated in your favorite neighborhoods. Be ready to pounce.
Be prepared to conduct pre-offer inspections: When multiple offers are submitted on a property, sellers usually choose the buyer who presents the fewest contract contingencies and most reliable closing. An offer that is contingent upon a home inspection won’t stand a chance if another buyer conducts a pre-offer inspection and waives their inspection contingency. Read more about inspections during a hot market here.
Be opportunistic: Keep an eye out for homes that may be overlooked by others. These could be listings with limited/terrible photos, dirty listings stuffed full of unsightly possessions, or listings in need of superficial updating and repairs. Try searching Redfin for homes that have been listed for more than a week. You’re far less likely to face competing offers on a home that’s been available for more than 7 days. The same is true of homes that go off-market but then return to Active status without selling. This is typically due to a “failed” inspection, the buyer’s inability to obtain financing, or sometimes just a buyer’s cold feet. These homes come back on the market with egg on their face and many buyers view the questionable listing status history and assume that something scary chased off the initial buyer. But the cause isn’t always a defect with the property! These situations may present an opportunity for a subsequent buyer to swoop in uncontested. Find out what happened and proceed with caution but you may just find a diamond in the rough.
Buying off-market: It’s rare (in most cases, we recommend sellers expose their property fully to the market) but you can sometimes buy a home directly from a neighbor, landlord, family/friend, or community member. Preparing to sell a home is no small feat and occasionally a seller decides that the risk of not getting top-dollar is preferable to the up-front costs and hassle of pre-listing preparations (both of which can be considerable). They may also want to avoid crowds of prospective buyers visiting their home. Keep in mind that you’re almost certainly buying an off-market home in as-is condition; usually the seller’s main motivation for selling privately, and you will likely have work to do before moving in. Keep your ears open for opportunities and don’t be afraid to ask an owner if they might be willing to sell to you off-market. If so, we can help make it happen smoothly. As with all purchases, be sure to conduct an inspection of the home before committing fully.
Pre-sales: Similarly, keep an eye out for new homes being constructed in areas you like. Sometimes we can reach the builder and agree on a contract to buy the home before they’ve had a chance to market it publicly. Be prepared to wait many months for construction/permitting to be completed and pre-sales also require a certain leap of faith since the house you’re offering to buy hasn’t been finished yet!
Forget about the list price: You just found the house of your dreams. Unfortunately, submitting an offer at the asking price rarely cuts it these days. With homes generally selling above their asking prices, the best way to remain objective while planning your offer price is to determine a value that you feel is supported by recent sales. We will also analyze market and neighborhood data together to help you understand how much is simply too much to offer. Value is subjective, so your offer should reflect what the home is worth to you.
Learn about the seller: Knowing even a little bit about the seller can help you craft a winning offer. Maybe there’s a specific contract term that means a great deal to the seller. Why are they moving? Sometimes a seller who’s still occupying a property loves being offered a rentback or delayed possession of the home after closing. Sometimes sentimentality factors in and they’re tickled that new dogs will be running around the yard. Etc., etc..
Compose a letter: Sending a personal letter along with your offer is a fantastic way to introduce yourself and tell your story. The best offer letters help a seller understand why you love their property and why you’ll be a perfect caretaker for it. Let them know you’ll be an exemplary new neighbor on a street where they may have made friends over the years. Convince the seller that you won’t back out and leave them high and dry mid-transaction. If all other terms are close or equal, a great intro letter can help tip the scales in your favor. We’ve even heard stories of sellers accepting 2nd or 3rd place offers, by price, because they fell in love with the buyer’s story… You never know and it’s a cheap strategy to try.
There are many ways to make your offer compelling to a seller, and all of them may not work for you or your situation. When you find a home that touches your heart and meets your needs, rely on your agent to guide your strategy and write a winning offer.
Be patient out there, and holler if we can help you or someone you know!
(Originally published May 31st, 2016; updated June, 2021)