How to Buy a Home in a Seller’s Market
Southeastern Wisconsin along with the majority of our nation is in what’s considered to be a “Seller’s Market”. What makes a Seller’s Market is simple supply and demand economics. There are far more buyers looking for homes in the past number of years than there are homes to put them in! When supply is low, prices go up. And as we have seen that can often mean multiple buyers placing offers on the same property in a short amount of time. This leads to a rise in value of those properties.
I’ll bet you’ve heard the term “bidding war”. This is the scenario that Realtors refer to as “multiple offers” often with escalator or accelerator clauses which automatically increase offer’s price over competing offers in an effort to “win” the bidding war. There are a number of ways that Realtors can advise their buyer clients to help them win these bidding wars. This is a conversation to have with your experienced agent. But what I would like to address here is the frequent concern I hear from sellers… “How can I sell my home, when I don’t have a home to move into?”
There are a number of scenarios to consider that can put you in the best position to make this transition in a Seller’s market. Not every scenario will be possible or work for every buyer/seller. However there are options!
- The best way to write an offer is without a Homesale Contingency. This means your offer is not dependent on whether or not your existing home sells. If you are able the optimal scenario for you would be to get pre-approved to buy a new home without the sale of your current home. Begin your search while getting your home ready to sell. When you’ve identified the right home, gotten good advise from your Realtor and secured an accepted offer, your existing home will then be ready to get listed! If drafted appropriately most of the time you can list your home immediately and benefit from the seller’s market and get both closings to line up!
- In the event you do not qualify to buy a new home without the sale of your current home consider looking into temporary housing. You will want a “Plan B” in place in the event you have an accepted offer on your home but cannot find suitable housing before your home closes. Sometimes you can negotiate with your buyer to allow you time in your home after closing but you can’t rely on that availability and there is still a deadline in place that you have to be out. A number of seller’s have found success with Airbnb and VRBO to find short term housing while they search for a new home. Also considering storage and staying with friends and family.
There are a number of different details and slightly modified versions of these two options of which you should should discuss with your Realtor. At Benefit Realty we have been successful in securing our buyers homes in this market because we are educated Realtors who go above and beyond to learn the most current and up to date methods of working in this competitive market.
It is possible to make this transition and we can help!