Buying a home can be difficult in any market. However, buying in a competitive market is often even more challenging. A competitive market means homes are selling quickly, and buyers have to put their best offers forward to compete with other buyers. These competitive markets offer many benefits, such as lower prices and easier negotiations, including higher competition for homes and difficulty finding home listings online.
4 Tips for Buying a Home in a Competitive Market
- Study up on what’s happening in your area.
To make a competitive offer, you need to fully understand the housing market dynamics in their area and how prices compare to historical values. If buyers are out of touch with the local market, they may overpay or undercut important buying details. To understand price values and trends, buyers should study property appraisals from three years ago and current listings to see what kinds of homes they are selling for.
- Talk to real estate agents, local employers, and homeowners to get an inside perspective.
Local agents and people who have lived in the area for a long time can provide valuable information that buyers should consider when drafting their offers. For example, if a buyer is looking at townhouses for sale in Dallas, TX, they will want to know how other townhouses recently sold in the same area and what prices they commanded.
- Create a clear and compelling offer.
A competitive market can be an attractive buying environment with low prices and low-interest rates, but it does not mean the market is friendly. It means buyers have to put their best offers forward to compete with other buyers. What matters in these competitive markets are details, such as closing costs and financing terms, that most buyers overlook when writing their offers. If a buyer’s offer is too vague or overpriced, they may end up with a house out of their range.
- Pay attention to the listing agent.
Different agents have different ways of evaluating offers and different reasons for which they will reject them. For example, an agent hoping to market a home at a lower price may reject out-of-hand offers that cost more than the listed price. Agents often have preferences for certain types of buyers and not others. To save time and reduce competition in the marketplace, homeowners should talk directly to the listing agent about their interest in a home before sending an offer.
Not all competitive markets are created equal. Hiring a real estate agent helps home buyers create the best offer possible and saves them time. Additionally, being proactive when researching the market and sending clear and compelling offers will help them attract more attention from other buyers and often result in greater success and satisfaction.