Increasing home prices and stronger existing homes sales are good news for homeowners trying to sell their homes, but the trends translate into challenges for buyers who are losing their negotiating advantage.
Home resales climbed 14.5 percent in November from a year prior and 5.9 percent from a month prior, according to the National Association of Realtors, and prices are expected to rise in all states in 2013. Listings fell to an 11-year low of 2.3 million, a 4.8 month supply. Where just a few years ago, sellers were willing to drop their prices significantly just to move their properties, now the days of buyer-vs-buyer bidding on homes is returning. It’s a good sign for the economy, but quite the challenge for buyers negotiating an offer on a house.
To get an edge in nabbing the properties housing hunters want, they should approach the buying process in several deliberate ways.
Firstly, home buyers who are planning to purchase a home this year should probably do so sooner rather than later to get the best deal as the housing market seems to have bottomed out and rates are on the rise. Secondly, spending a little extra time looking for a strong real estate agent can have significant payoffs. The more embedded and respected the real estate agent is, the more likely the agent has a good number of relationships in the industry, and can better can negotiate for you.
Savvy home shoppers will be vigilant about searching listings online. But remember that while it’s easy to browse homes online and hope to stumble into a deal, meeting the sellers in person provides an opportunity to negotiate on price. But, even with the housing market increasingly turning in favor of the sellers, aggressive buyers can still work with sellers toward a price point they want.
Finally, buyers who have a preapproved loan and are ready to close quickly have an advantage in seller’s markets.
If there’s one thing that’s in a buyer’s favor in a seller’s market it’s that the housing hunting itself should be easier because there are fewer options to choose from. With a glut of homes on the market, including many foreclosures, buyers the past few years have struggled to sort through all their options.
The improving housing market does present some challenges to buyers wanting to land a deal on their dream home. But buyers can rest assured that once they do successfully close on their home, the market will be in their favor as they’ll have an asset increasing in value.