How To Find Great Deals in a Seller’s Market
When you’re buying a house you want to get a good deal. I’ve never met a client who wants to overpay for their home! Rochester’s current real estate market favors sellers due to the low amount of inventory, and houses are often attracting multiple offers. So how can you make sure you get a great deal on a house? In this article I’ll explain why overpaying may actually be underpaying.
In the current market where housing inventory is limited there are two types of listings – those that have sold, and those that are going to sell. As prices continue to increase even overpriced houses begin to sell. It’s the polor opposite of a buyers market where housing prices drop and sellers do price reductions to play catch-up.
For that reason it’s better to buy sooner rather than later. After all, if I told you a stock had gained value five years in a row and it’s still underpriced you’d buy it.
Houses in great condition tend to attract multiple offers, while houses that need work take longer to sell. Almost everyone wants a house that’s move in ready, so those are the ones you’ll be competing for.
My clients usually express how worried they are about offering more than asking price in a multuple offer situation. Are they overpaying? Going to lose equity? Actually no. I’ve found that even when they’re overpaying, they’re actually underpaying.
The truth about multiple offers is this… the house was under priced. Many agents have a tough time swallowing this. I’ve seen well respected, highly productive agents argue vehimently against it, but it’s undenyable.
A house is priced at $149,900 and attracts six offers. The highest offer gives the sellers $165,000 for the house. Any reasonable person can see that the house would have sold at an asking price of $165,000. It was underpriced.
The real question is this… would it have sold at $169,900? How about at $179,900? For full price, maybe not. But that price may have garnered an offer of more than $165,000.
When a buyer is in a multiple offer situation it’s actually an opportunity to buy a house that was underpriced. You won’t find the best deals by looking at houses that have been available for several months. It’s extremely important in this market to look at new listings daily, find the listings that are underpriced and act quickly.
One way my clients accomplish this is by using automatic email alerts. Our MLS, SEMAR, has unbelievable technology in place to help agents. The automatic email technology allows us to customize a search based on the buyers criteria so they receive an email every time a new listing comes on the market.
Setting buyers up on these searches ensures that they’ll see every new listing so they never miss an opportunity. To get a good deal in this tough market you’ll have to win against multiple offers, so you need to see new listings as they come on the market.
When you see new listings you give yourself a chance to make an offer on an under priced home. The best deals sell in multiple offers within a matter of days. Those are the houses you’ll want to go after, because in this market overpaying is actually underpaying.