Finding your dream home in a seller’s market can be stressful. The Triangle area of North Carolina is a great place to sell a home right now…and a tough place to buy one. The Durham, North Carolina in market in particular is a seller’s market right now, for homebuyers and investors alike. And this is true for many areas across the country.
A seller’s market is what you get when you have a lot more demand for housing than you have inventory. In the Durham area, this is the result of a quickly increasing population (the Triangle was the 16th-fastest-growing Metro area in the country this year) and a housing inventory that is still trying to catch up. High demand and low inventory means sellers can sell their homes faster and command higher prices. For buyers, it means getting the home you want under contract can be a daunting proposition. As a buyer, you can expect to pay close to, or above, list price, and that’s only if you are able to secure the house in the first place. A seller’s market means multiple offer situations are a lot more common and you may be competing against other buyers who want the house too.
But there’s no need to be discouraged. You can still find a great home in this kind of market – you just need to be prepared, motivated and ready to act quickly. Here are seven practical tips to help you beat out the competition and buy the house of your dreams in a seller’s market.
1) Find a great real estate agent.
The first one should go without saying, but find a great real estate agent! This is not the time to use your wife’s cousin (unless you know for a fact he’s amazing!). Interview multiple agents, ask for referrals from friends who’ve had a great home-buying experience, check out agents’ websites, testimonials, and so on. (Feel free to ask me for a referral – I can connect you to lots of great agents across the country.) Being successful in a seller’s market requires an agent who is very familiar with your local real estate market, and who is confident using all the tools at her disposal to get you the home you want. When you interview real estate agents, you should make sure that being a realtor is their full-time job, that they have experience in the specific area you’re shopping in, and that they have proven experience winning in multiple offer situations.
2) Get your financing in order.
Meet with a lender, get pre-approved, know exactly what you can afford, and be ready to move quickly. You need to be prepared so you can submit an offer fast and not get held up with paperwork while someone else swoops in on the house you want. Aim to get everything lined up so all you need to do is find the house. Your real estate agent should have a number of lenders and mortgage brokers they trust and can refer to you.
3) Know what you want.
In order to move quickly in a hot housing market, you need to have a clear idea of what you are looking for. As new homes come on the market, you have to be able to decide quickly if it’s a house you want or not. When houses are selling in a matter of days, or even before they hit the market, being confident that a home is the right home for you can be the difference between going under contract and getting a Redfin alert that the house you saw yesterday is now under contract with someone else.
You probably have some general ideas about what kind of house you want, but getting specific ahead of time can help you act wisely when you have to make quick decision. Especially if you are buying a home with a spouse or partner, having a clear idea ahead of time about what exactly you want in a house is crucial to making the home-buying process smooth and successful.
Research neighborhoods ahead of time. (And if you’re trying to decide what neighborhood in Durham is best for you, check out my neighborhood guide.) Decide what things are absolute deal-breakers and what things you can compromise on. Be clear on whether you’re up for an older home that may need some work, or a newer, updated home. Make a list, be as clear and specific with your real estate agent as you can about what you want, and you’re well on your way to snagging something you really love.
4) Move fast!
This should be obvious, but when homes are selling fast, you need to move fast. Many homebuyers get nervous about moving quickly…and this is totally understandable! Buying a home is a huge purchase and not one you should rush into. But…once you’ve done your homework, know what you want, and have your financing lined up, you should be ready to jump on homes as they come on the market. Go see the home you’re interested in as quickly as possible and be ready to make an offer that day. You aren’t finalizing the sale today, you’re just getting it under contract and knocking out the competition. And if your agent isn’t moving quickly enough or responding to your calls promptly, find a new one.
5) Don’t lowball.
You’ve identified the house you want – now you have to get it under contract. How do you do this? The simple answer is: make a strong offer. Don’t lowball the seller in the hopes of going back and forth a few times and maybe saving a couple thousand. The difference a couple thousand dollars makes to your monthly payment is pretty minimal, and in a seller’s market you may find yourself in a multiple offer situation where your offer has to compete against other equally motivated buyers. If you submit a lowball and others have submitted higher offers, many sellers aren’t going to waste their time going back to you to make sure that’s your final offer.
Keep in mind as well that selling a house can be an emotional decision as much as it is about the money. It’s important to create a good vibe around your offer, which means not insulting the seller with a lowball that says “I don’t think your house is worth that much.”
6) Make a strong and uncomplicated offer.
A strong market and dealing with multiple offers, you need more than just a strong purchase price to make your offer stand out. Not only should your purchase price be competitive, but the other components of your offer should be uncomplicated and leave no room for confusion, or for uncertainty that you will make it to closing.
When faced with multiple offers, a seller is not only going to look at the purchase price offered. They will look at time to closing, earnest money and due diligence deposits, any contingencies or particular requirements, and so on. Make your offer as simple and clean as possible. Sellers want to close! They don’t want to wait three weeks with their house under contract only to have you back out. More cash up front, a shorter due diligence period (in NC at least – how this works varies by state), not having your purchase be contingent on the sale of your current home…these things will all make your offer seem like more of a sure thing.
7) Write a letter to the seller.
Although no one thing is guaranteed to get you the house you want, writing a personal letter to a seller can set your offer apart from other ones, and sometimes make the difference between the seller accepting your offer or another similar one. I know sellers who have accepted a lower offer because the buyer wrote a personal letter that really connected with them. And I recently went under contract with a buyer who won out in a multiple offer situation after handwriting a heartfelt letter. We submitted a strong, clean offer…but the wife of the couple wrote a letter explaining how she could imagine their future kids running in the yard and how much the house felt like home to them already. Most homeowners want to sell their house to someone else who will love it and care for it like they have – so let the sellers know that’s you!
Bottom line? Prepare, then pounce!
A seller’s market doesn’t mean you can’t find a good deal on a great home. It probably means you aren’t going to snag something for far below market value, but with the right mindset and the right preparation (and a great real estate agent at your side!) you can find and secure an amazing home . This isn’t a time to waffle – be confident about what you want and how much you want to spend, and don’t be afraid to jump on opportunities quickly.
Check out these other great articles for more tips on how to buy a house in a seller’s market!
- Tips for House Hunting in a Seller’s Market, from the New York Times.
- 7 Tips to Help a Home Buyer Win in Multiple Offer Situations, from Kyle Hiscock
- Buying a Home in a Seller’s Market, from Lynn Pineda
- Writing a Letter to a Home Seller in a Bidding War, from Time.com
About the author: My name is Matt Minor and I’m a real estate agent with Hunter Rowe Real Estate in the Raleigh-Durham area of North Carolina. I’d love to help you buy or sell a home in the Triangle. Give me a call at 919-450-5999, or email me at email@example.com if you’re thinking about buying or selling a home in Raleigh, Durham, Chapel Hill, Cary, Apex, Carrboro, Clayton, Fuquay-Varina, Garner, Holly Springs, Knightdale, Mebane, Morrisville, Sanford, Smithfield or Wake Forest.