Though many feared economic instability in early 2020 would lead to a real estate slowdown, the market has actually been booming this summer and fall here in Pittsburgh. Record-low interest rates and changing home needs have led to a surge in buyer demand—and a lot of buying competition. A booming market is good, but it might make you wonder how to win a bidding war in a seller’s market.
How to Win a Bidding War as a Buyer
High buyer demand isn’t the only challenge today’s home buyers face; seller hesitation has caused a decrease in the inventory of homes for sale. This low-inventory high-demand market is the ideal scenario for a bidding war—that is, for two or more buyers to compete for the same home. So the big question is, how do you win a bidding war against tough buying competition?
Get preapproved for a loan
Getting preapproved for a loan before you start your home search has a lot of big benefits. On a personal level, it helps you determine how much you’ll qualify for and aids in setting a monthly budget. It also shows sellers that you’re a serious buyer who’s capable of procuring a loan, and can help expedite the closing process.
Getting prequalified is an essential first step in a competitive market, but only 52% of active homebuyers actually get preapproved before starting their search! By getting preapproved, you can launch yourself ahead of nearly half your competition.
Make a serious offer upfront
In a less competitive market, many buyers will present lowish offers in an attempt to barter a lower final price. This is not a recommended strategy in a fast-paced market like the one we face today, where the average sold property receives nearly three offers, according to the National Association of Realtors.
In the case that a seller receives more than one offer, they will likely pick a day to sit down and compare all their offers before deciding on one. Should your offer appear much lower or less appealing than the others, it will likely be dismissed right away—no chance for negotiations.
Homes are selling fast these days. In fact, the National Association of Realtors noted that 68% of homes sold in July 2020 were on the market for less than a month—much lower than the seasonal average of 29 days.
For you as a buyer, that means you might not have time to waste weighing pros and cons or shopping around for the perfect home. When you see a home you love, you’ve got to make a move before another buyer does.
The Pittsburgh Market Is Hot… Are You Ready to Buy?
One of the best things you can do for yourself as a home buyer in a fast-moving seller’s market is to find an experienced local agent. You need a professional who can help you search quickly and efficiently, who can ensure your offer stands out from the crowd, and who can negotiate for the best possible terms and conditions for you. Contact the Jim Dolanch Real Estate Team today to learn more about what we can do for you.