Market conditions have never been stronger for buyers in most of the country, which means there are lots of homes for sale with many sellers looking to make a deal. It has never been a better time to buy a home, and here are a few strategies to capitalize on a housing market that is tilting in the buyer’s favor.
To buy a house in a buyer's market, follow these recommendations:
- Organize your finances.
- Consider fixer-uppers.
- Check out up-and-coming neighborhoods.
- Manners matter.
- Utilize agent intel.
- Be patient.
- Remember: penny wise, pound foolish.
Organize Your Finances
Make sure you have a clear handle on your finances in advance of your home search. What is your realistic budget? Cash is always king, but for those who plan on financing the purchase, get a loan preapproval letter from a mortgage banker. The buyer who has done his or her homework and is prepared and ready to move fast is more appealing to a homeowner who is in a hurry to sell.
Are you open to doing work on the home you buy? This is where the deals are. Most buyers do not want to invest the time and energy in a fixer-upper. These are the listings that linger on the market and could be an opportunity for the savvy buyer.
Check Out Up-and-Coming Neighborhoods
Urban sprawl has created more and more great neighborhoods. Expanding your radius might open you up to an opportunity. Real estate agents are generally very knowledgeable about neighborhood trends and new opportunities in their markets.
Agents take careful note of the customers who come in to view properties. Respectful and polite behavior from the prospective buyer goes a long way. Homes are personal – sellers want to get top dollar, but they also like to sell to people who love their home. In a recent listing with multiple buyers interested in purchasing the home, the seller ultimately chose the buyer who said he loved it just the way it was, as opposed to another buyer who said he was going to gut renovate it. It's not that a new owner is not entitled to renovate a home as they please, but if the home is not in obvious need of repair, it may be best to keep these plans to yourself.
Utilize Agent Intel
Real estate agents have the pulse of the market. Ask them where the deals are. They also are in touch with new developments. For example, sponsors of new developments in New York City advertise deals to agents that a buyer might not be aware of.
It is OK to make a lowball offer, but if you don’t get the counter you had in mind, be patient and wait it out. Over time, the seller may see the light and change his tune. Many sellers in a buyer's market soften and come back to offers that were made months prior. Sometimes sellers just need more time to face the reality of the current marketplace. After all, it may be a harsh reality for some, and take a bit of time to process psychologically.
Remember: Penny Wise, Pound Foolish
Do not get so focused on winning every aspect of the deal that you lose sight of the big picture, which is buying a dream home for a great price. Many buyers are so worried about leaving money on the table that they don’t realize they are getting a home that is already deeply discounted. They have already “won.” Keep your eye on the prize and don’t get nitpicky.
Everyone is looking for a good deal, and for today’s buyer, this is the market to get it. In much of the U.S., buyers have never had a market this good. It's important to remember that one only knows the perfect time to transact in the rearview mirror. If you can find a home that you love at a great price, buy it. It is not a stock or commodity, it is your home where you live, and it will hopefully bring you many years of joy. More importantly, nothing remains this good forever. It is only a matter of time before the pendulum swings and real estate is back to being a seller’s market again.
Are these must-haves on your list?
One of the first steps you take when deciding you want a new home is determining what you need in order to be happy there. The list of your must-haves can get long, and you reasonably can’t expect to find a house that perfectly matches all your criteria. “Someone has a list of 10 things – if they can find a house that has seven or eight of those, they’re doing pretty good,” says Jeff Plotkin, a Texas-licensed Realtor, attorney, certified public accountant and vice president of Habitat Hunters Inc. in Austin, Texas. Deciding what needs win out in your next home search can be tough, but there are a few key features and amenities many buyers seem unwilling to live without.Right in your price range
Right in your price range
Being able to afford your new home is a given, but buyers are often faced with having to choose between stretching their budget to have the master suite they want or having more reasonable monthly mortgage payments. Price often wins out in the end – you’re less likely to enjoy that master suite if you’re eating soup and foregoing vacations for the next five to 10 years to pay it off. In the 2018 National Association of Realtors Home Buyer and Seller Generational Trends report, home affordability was one of the three most important factors for respondents who recently purchased a home – behind only quality of the neighborhood and a location's convenience to work.In your preferred location
In your preferred location
Homebuyers care a lot about being able to get from point A to point B – as well as points C, D and E. Your future neighborhood can dictate what school your kids go to, how long it takes to get to work and how easy it is to stop at the grocery store when you forgot an ingredient for dinner. Plotkin says buyers put a lot of stress on where the house is, rather than what’s in the house itself. They’re looking for “proximity to schools, shopping, entertainment, public transportation,” he says.Interior over curb appeal
Interior over curb appeal
A handsome exterior keeps potential buyers from quickly driving away, but insight from new construction marketing site HomLuv.com reveals that it’s the interior that most often serves as the deal-maker. HomLuv’s website allows homebuyers to begin their search for a new home from the room they care about most, whether that’s the kitchen, living room or master bathroom. The one part of the house people don’t seem too worried about? Outside. In the roughly two months since HomLuv launched, “no one has chosen to look at exteriors first,” says Mark Law, vice president of product management for BDX, a home builder marketing company and parent company of HomLuv.The right number of bedrooms
The right number of bedrooms
While the interior of the home allows more wiggle room to compromise on your needs, there are some details that buyers must have. The right number of bedrooms would be the big one. Family expansion is often a primary reason homeowners start looking for a new house, so leaving out that extra room would defeat the entire purpose of the sale. According to the NAR report, 85 percent of homes purchased by respondents in 2017 had three bedrooms or more.Window treatments for reference
Window treatments for reference
Staging matters in a home. As much as we think we can picture how a vacant house will look with our own furnishings and decor, at the end of the day we need some suggestions. Law says builders will include big picture windows in bedrooms or over the tub in a master bathroom to let in natural light, but if the photos show the space without curtains or blinds, house hunters will inevitably see a design flaw. “They’ll say, ‘I’m not an exhibitionist,’” he explains. To avoid turning homebuyers off, window treatments should be included in listing photos and for home tours.Move-in ready
The condition of the home you shop for often goes hand in hand with your budget and the neighborhood you hope to live in. If your budget is at the lower end of the price range in the hottest community in town, you’ll likely find yourself buying a house that needs a little love. If your budget doesn’t restrict it, chances are you’ll have your pick of properties that have been turned by real estate investors. “The [buyer] demand is for 100 percent move-in ready condition,” says Bobby Montagne, CEO of Walnut Street Finance, a private money lender focused on home flipping in markets in Virginia, North Carolina and the District of Columbia metro area.Possible to picture your vision
Possible to picture your vision
Even if you’re one of the detractors who prefers a fixer-upper, it’s still necessary to be able to envision how the space will look once you’ve added your personal touches. Based on reactions from HomLuv users, details as small as the cabinet color in a photo can change the way a person thinks about a house. Law says he’s found preferences differ from region to region – darker cabinets may see more love in the South, while in California the preference is for white kitchen cabinets. “You could offer a free puppy and free pots and pans with the house, but if the cabinets are dark they still don’t want it,” he says.Warranty available
For newly built homes and those that have been recently flipped with significant work, you want to know that the professionals involved stand by their work. New construction homes often come with a warranty from the builder or the option to get a third-party warranty, and you should ask the investors involved with a flip for the same level of protection. “A good builder [or] a good flipper does not have a problem with that,” Montagne says. If an issue arises within the life of the warranty related to the workmanship, you can rest easy knowing you’re covered financially for the repairs.Potential for value growth
Potential for value growth
Your home isn’t just where you’ll live – it’s also an investment. There are a few easy decisions you can make that reduce the chances of losing out on potential growth in value over time, whether that means buying in a neighborhood where home values are steadily growing, finding a home in a desirable school district or avoiding living next to a strip mall. “When you’re buying a house, you’re not only buying it for yourself, you’re buying it for resale,” Plotkin says. “So most people are not going to want to back up to commercial [property] or a busy road.”Read More
After earning a degree in Economics from The University of Pennsylvania, Arriz worked in wholesale sales for several top fashion designers in New York City, including Calvin Klein and Ralph Lauren. While her business sense, tireless work ethic and integrity fuel her success, most importantly, she believes wholeheartedly that one’s living space should be not only an investment, but also a home and sanctuary.
Arriz has resided on the Upper East Side for 30 years and currently lives with her husband, three children and her miniature schnauzer, Lucy.
Devon Thorsby | June 5, 2019
Homeowners should not fret, as long as they're prepared for the possibility of a downturn.