Tips-Buying In A Low-Inventory Market
1. Know the difference between a good opportunity and an impulse buy. Do your homework and learn about the neighborhood and the market in the area. Get information from your Realtor about comparable properties in the area, finding out what else has sold and at what price. Is property priced excessively low? Has it had many price reductions over several months? The more you know, the better position you will be in to buy.
2. Be prepared to pounce if you need to! Get pre-approved and have the necessary cash on hand for down payment and closing costs. don’t let financial snags be the reason you don’t get your dream home. You won’t be the only bargain hunter out there so be ready if the right deal comes your way.
3. Set a price limit for the property and stick to it. Bidding wars can be a waste of time and often emotions can get the best of a buyer. Determine your top offer at the beginning and determine a ‘walk away’ price, at which you can walk away from the deal with no regrets!
4. Motivated sellers are a good thing but in a market where there are few homes to choose from, savvy sellers oftentimes have the upper hand. Your agent should have a feel for whether offers coming in and can ask the listing agent for a heads up, should another offer come in. How hot is this property? Your Realtor can tell you how long a property has been on the market, how many price drops have occurred, whether the property is vacant and the seller has moved, and other valuable information. Deed information is generally available to the public and a potential buyer can find out what the seller originally paid for the home,
5. Make sure the property has a clear title. The seller may be forced to sell because they are in over their head. A title search can assure the buyer that the property can be transferred without risk and that they won’t be absorbing contractor or other types of liens on the property. If a property is in foreclosure or bank-owned, make sure you understand what this means in terms of risk and timelines.
