Buying in a Seller’s Market
To the layperson, the term seller’s market points to the general fact that real estate is moving briskly and that sellers typically do well financially when they put their houses up for sale – homes sell fast and for nice prices. But, there is actually a technical and less general definition: a seller’s market is characterized by an absorption rate of five months or less for homes of a particular type.
In other words and for example, if suburban homes with three bedrooms are selling in a particular neighborhood at a rate of 5 per month, and there are 15 such homes currently on the market there, those homes should sell out within three months. As three months is less than six months, voila! You are experiencing a seller’s market.
Buying in a seller’s market can be tricky and, if you’re a buyer, be mindful of the following:
- Homes will sell fast, and the market rewards the ready and the quick. Be vigilant in your search, study the market with your Realtor in advance, and get pre-qualified by your lender before searching.
- If you like to “sleep on” things before making big decisions, well, change your ways. Here today, gone tomorrow. Or gone in a couple of hours, even!
- Expect to pay near, at, or even above list price in many cases.
- Be patient. You may not get the first house you want. Or the second.
- Expect multiple offer situations in which you are competing with other buyers—sometimes lots of other buyers—for the same property. Candidly, they’re no fun. Put your best foot forward, cross fingers and say prayers, and be confident in your Realtor’s advice and perspective.
- Work with an experienced buyer’s agent. You NEED someone who knows the right tricks to make your offer as competitive as it can possibly be, or you are likely to miss out. The SimpliCITY Nashville team has two Accredited Buyer’s Representatives and are very creative in competitive situations.