A quick definition of a Seller’s Market is when many Buyers are competing for a small inventory of houses. We are currently experiencing this trend in SW Florida. The inventory has dropped significantly the past few months and new Home Buyers are migrating to Florida in record numbers. What does this mean for current Buyers?
With a low inventory, the Buyer needs to be less selective on the features that are needed, wanted or would like to have. In the past I had Buyers list all the features they wanted in their Dream Home. Then we would edit the list crossing off things that were not necessary in the decision, items that were negotiable and items the Buyer could not live without. This list has never been more important than in a Seller’s Market.
Every Buyer needs to realize, there is lots of competition on each house. To get the offer to contract a Buyer needs to be aggressive, have everything in order and be realistic.
First thing first. Get your financing in place. Sending an offer with a Bank Loan approval letter is far stronger than the Buyer who will apply after the contract is accepted. Cash offers will always take precedence over financing, but taking this step first shows the Seller you are a serious Buyer.
If you are planning to put in “Low Ball” offers, you are wasting everyone’s time. If the property is priced correctly, the Seller should get multiple offers very quickly. I have had clients in shock when they lose an offer at List price. Price is dictated by Demand. More Buyers than Sellers + Low Inventory = Demand. It is not unusual to see houses selling for higher than list price in a Seller’s Market.
Compromise in inevitable. The chances of finding a home with all your wants and needs is very slim. As I mentioned earlier, take your list and decide what you are willing to give up. With fewer choices, the house with all your wants may not even be in the current sales inventory.
A Seller’s Market is not for every Home Buyer. Buyers need to weigh the importance of buying now or waiting. The Buyer needs to be aggressive and realistic with offers. Most important, work with a knowledgeable Realtor.
Broker/Owner, Investment Property Consultant
Real Estate Services of SWFL, LLC