The real estate market in Orlando continues its red-hot streak, though things have begun to cool as is usual in the fall months. However, the market still favors sellers as this September’s sales were 3 percent above the same month last year. In addition, the median price for increased nearly 9 percent in September and that makes fifty consecutive months that the median price rose. Some 2,857 transactions closed during the first month of fall, representing an increase of 3.14 percent from September 2014 and a remarkable 10.58 percent increase from August of this year. Currently, there is just over four months of inventory supply on the market, about two months shy of the six month parity that represents equilibrium between buyers and sellers.
How to Buy a Home in a Seller’s Market
What these figures mean is the Orlando real estate market is still more favorable to sellers rather than buyers. In a true seller’s market, it’s difficult for buyers to find the right home, particularly one that means all their wants and needs. Compromises are often necessary and having to give up this or that goes with the territory. In fact, it’s not just central Florida that’s experiencing such a phenomenon in the real property market, the median price of homes has risen 8 percent nationally year-over-year, according to the National Association of Realtors.
A seller’s market means that buyers have to be smart and prepared if they want to get the right house at the right price. Agents suggest that prospective buyers start by looking online at homes, narrowing down neighborhood choices and deciding between must-have and preferred features. —US News and World Report
If you’re in the market to buy a home, all certainly isn’t lost. You do have options to find the right home for you and nearly regardless of market conditions. Since interest rates remain close to historical lows, new credit modeling, and the availability of so many financing options, buyers still have purchasing power. Here are some ways you can buy a home in a seller’s market:
- Get your financing in-order. If you don’t have the ability to pay cash outright for your home purchase, do the next best thing and get pre-approved for a mortgage. This is an in-depth look at your finances and credit, and, gives you the real amount you’ll be able to borrow. This gives sellers peace-of-mind because they’ll know you are qualified and won’t have to suffer through the home loan approval process if they accept your offer.
- Know your budget. While a pre-approval will certainly tell you how much you can borrow, it doesn’t account for other financial factors. You need to think about all your expenses, which include not only your down payment and earnest money deposit, but moving costs, utility deposits, and so on.
- Keep your options open. There might be more than one aspect you’re firm about, such as the number of bedrooms and bathrooms, or even location. If you can be flexible with a few things, you’ll increase your options and might find an unexpected choice.
- Include an escalation clause in your offer. To get the seller’s attention, you should not only put in a strong offer but also be willing to include an escalation clause. This is the amount you’re willing to pay over a competing offer.
- Be flexible with the timeline. Sellers generally have a timeline and when you show flexibility, your offer becomes more attractive. Let the seller know about your willingness to make changes to the timeline upfront.
In addition to these steps, you can also try to connect with the seller on a personal level. If you have something in common, it’s helpful to share to make a more personal appeal. To speedup the process, you can opt to pay for a pre-inspection. This is a shorter version of a full home inspection and will show the seller that you are sincere about going forward with the transaction.