If you want to move to New York City or another area that currently has a hot real estate market, then you need a different strategy than you would when buying a house in a slower market. Buying a home in a seller's market is always a challenge for buyers and the last thing you want is to find your dream home and then lose it to another buyer. Even if you don't lose the sale, you could find yourself in a bidding war with another buyer and end up overpaying for your new house. To avoid these issues, make sure you don't make these common mistakes when buying a home in a seller's market:
Mistake #1: Not Setting a Maximum Buying Price and Submitting Your Strongest Offer
In a buyer's market, you can low-ball and negotiate. In a seller's market, a low-ball offer will simply be rejected out of hand by the seller. Since you do not want to end up losing a house because your offer is too low, decide what price you are willing to pay for the home and submit your best offer from the start.
For example, assume for a moment you find a house that is selling for $500,000 and you would be willing to pay no more than $525,000 for it, then make your initial offer the latter and mark your purchase offer as "best and final". If the seller comes back and asks you for $550,000 then that is too high and you should walk away and find a different property.
Mistake #2: Not Keeping in Mind There are Always Other Properties You can Purchase
Unless you are purchasing a home in a very remote area with seriously limited housing inventory, it is vital you keep in mind that there are always multiple properties you can buy. Even if you find the house of your dreams, you need to keep the perspective that there are always other options. Keeping your options open to buying a different property if one doesn't work out will keep you from overpaying out of desperation.
Mistake #3: Working with a Real Estate Agent Who is Inexperienced or Unfamiliar with the Local Market
Another common mistake many buyers make when buying in a seller's market is working with an inexperienced real estate agent or one who is not familiar with the local market. Buying a house in a hot market is not the time you want to give your friend who just got their real estate license a chance to help you out. While you can list your home with them, find a Realtor who is a top performer for a more successful purchase.
