We’ve heard for a long time now that the current housing market is a seller’s one. Since the start of the global pandemic and the subsequent shift toward being at home more and more, homes have become the most coveted purchase for getting through the pandemic. While economic analysts predict that the current seller-friendly housing market will steady eventually, that unknown quantity of time can be frustrating for people that are looking for a home now. So what can you do for a buyer who can’t be patient and wants to buy as soon as possible? Here are some tips on helping your client buy a home in a seller’s market.
According to Forbes Advisor, it is important to prepare your buyer that they will most likely have to overpay the asking price for a new home in the current market. Listing prices are being blown out of the water in some cities, and many buyers are also purchasing with cash to get ahead. Furthermore, and this is happening more and more in highly competitive markets, buyers are not even seeing a home before making a cash offer on it – which of course sounds quite extreme. However, that’s how competitive the market is at the moment! As a seller, you can likely expect to get more than what you are asking for or getting appraised at and real estate agents can expect better commissions on sales, but also quite a lot of frustrated buyers.
Buyers will be need to made keenly aware that credit requirements are still quite tight, despite the economic stimulus packages and other national and state moratoriums. Even though we have been asked more and more to either work or study from home, don’t expect much in the way of financial leniency for buying a home. Many lenders are requiring higher credit scores to qualify for lending, partly out of fear of any future economic downturn and wanting to avoid another 2008 situation.
Down payment expectations though, on average, seem to have lowered, some as low as 3% depending on where you want to buy in the country. Having a good amount of money saved for a down payment is definitely something homebuyers should be encouraged to do. The old adage about 20% of the price is likely a little extreme, but it certainly wouldn’t hurt if prospective buyers had that much to start with!
It’s important to stress to potential home buyers that not only is there a lack of ‘inventory’ when it comes to homes available on the market but there’s another factor brought on by the COVID-19 Pandemic. Globally the supply chain for pretty much any product was messed up in 2020/21 and the world is largely only just starting to feel the effects of these supply chain issues. Building materials was one of those things affected by the pandemic, so not only are there not enough houses on the market but there also aren’t enough houses being constructed! As real estate agents, stressing this issue to buyers is crucial in explaining the market further.
Furthermore, point out the good news. This current climate won’t last for ever. It will swing to a more even playing field, it might even be more of a buyer’s market soon! Financial experts suggest that the housing market is already showing signs of steadying.
When it comes to navigating the ultra-competitive waters of the housing market, it’s important to have knowledgeable and trustworthy professionals on hand. Lantern Real Estate Group are the leading Real Estate Agents for the metro Atlanta area and would love to get you into your dream home or make your current home someone else’s.