Right now, there is no question that on a local (and national) level, real estate markets are on a major upswing. In the Grand Rapids real estate market, and more broadly, most of the West Michigan real estate market, the demand for homes is outpacing the supply substantially. That means that while spring is a great time to buy, there will be a lot more competition for the best houses being listed on the market this season. It is at times like these that having a professional, experienced realtor on your team as a buyer's agent can make all the difference in the world. Here are three changes to expect if you haven't purchased a home on a seller's market before.
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Prices will be up; plan accordingly. This is simply a given. Depending on the area, home prices in West Michigan have generally increased since their sharp decline in 2008. That means that the same $175,000 mortgage may buy you less home, in terms of amenities and square footage, than it would have five years ago. However, this increase in prices has also resulted in owners finally being willing to list homes that may have been undervalued for years, meaning there will also be some truly excellent, beautiful homes for sale. Be sure to adjust your expectation in terms of size and price by talking to your realtor about what homes in the area are currently falling within your price range, so you don't find yourself surprised when you get ready to view properties.
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You may not win bidding wars. When two or more possible sellers decide they are both in love with the same property, the seller can, in a real estate market like our currently, sit back and wait to see who wants the home more. Many buyers are currently making offers at or even exceeding the asking price, while five years ago it was common to have a first offer well below the advertised asking price. It's always best to lead with your strongest, highest offer in a very competitive market. If you offer $10,000 less than the other buyer, the seller will have little reason to consider a second offer from you before accepting the higher offer. Discuss your strategy with your realtor, and be prepared to view and make an offer on more than one property, as there is a chance another buyer may be more motivated than you on any given property.
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Don't expect many seller concessions. When the market is tilted in the buyer's favor, as it has been for nearly a decade in this area, sellers will often make concessions in order to sell their home at or nearly at, their asking price. This could include offering to pay all the closing costs, making repairs or modifications before closing at the request of the buyer, or allowing pieces of furniture or appliances to be sold bundled with the home. In a seller's market, however, the current owner of a home has little motivation to bend over backwards for a potential buyer. Coming to the table with an offer that puts a lot of demand on a seller may be the difference between them accepting your offer and another one. Be reasonable with your expectation for seller concessions, and discuss what is likely to be offered or accepted by a seller with your realtor.
When the market is hot and buyers and their agents must be aggressive, there are usually some high-quality properties for sale on any given market. Working with an educated professional representing you as a buyer's agent during the bidding and viewing process can make acquisition of your dream home a much smoother process. Give the team at Pyxis Realty a call today, and find out how we can help you get into your new home!