With a shortage of properties on the market, and house prices still on the up, making yourself stand out as a serious buyer is key in a sellers’ market. Here we offer a number of ways to help you be successful in a competitive market…
Despite the stamp duty holiday finishing in September, there is still a lot of competition for homes – which creates what is known as a sellers’ market.
According to the Home Owners Alliance House Price Watch, house prices and sales continue to rise and buyer demand has remained strong. The increased competition for the few properties on offer has also been pushing up prices.
This shortage of properties and demand from buyers is what creates a sellers’ market, where anyone marketing their property has the advantage – with prospective buyers keen to snap up what’s on offer.
So what is the secret to securing the property you want in this kind of market?
The main thing to note is that you have to be ready to act quickly – and that means having all your ducks in a row. Being prepared is the secret of success here.
First off, if you have a property to sell, find a buyer. Without that, few prospective sellers will take you seriously – and unless they are happy to wait around for you to sell your own home, they are likely to favour other buyers over you.
So what else should you have in hand? First of all, if you will need a mortgage, you should have a clear idea of how much money you can borrow. It is important to speak to a mortgage adviser prior to house hunting to understand how much you may be allowed to borrow. It is also possible to agree a mortgage in principle with a lender, although this is not a guarantee as the lender will need to agree to a specific property and your personal circumstances in more detail.
In some cases, estate agents won’t even let you look at properties until they’ve seen evidence of this, as they want to avoid time wasters who aren’t ever actually going to go through with a purchase.
If you are a cash buyer, ensure you have proof of available funds, to show you are serious.
The next thing is to get a conveyancer on board, who can carry out the necessary ID checks and other legal requirements in advance, so that you are good to go. These two things will make you look like a good prospect and a reliable buyer in the eyes of the property vendor – and can swing the balance between them accepting your offer or someone else’s.
Be the Ideal Buyer
If the property buyer is also moving to a new property, they will want to leave themselves in the best possible position as well, so you will be a far more attractive proposition if you are not in a chain. This is of course not possible for everyone but selling your home and moving into a rental property can improve your chances when it comes to looking for a new home.
It’s also worth building up good relationships with estate agents in your area, so they can see that you are a serious buyer, with all your preparation done. If you’re lucky, they will show you properties before they even make it to the online marketplaces, putting you in great position to secure a purchase before the rest of the home-buying public even know the property is on the market.
If you’re looking for a new-build home, it is also worth talking to developers to find out what projects they have coming up, so that you can get a foot in the door at an early stage. And if you want a house in a particular area, drive around and see what is on offer. You could even pop some notes through the doors of houses in the area you have your heart set on – you might find someone who was thinking of selling who will jump at the chance of a ready-made buyer and the chance to avoid estate agents fees!
Make an Offer
Once you’re ready to put an offer in, make it a sensible one. In a sellers’ market there’s little point in going in at an insultingly low price point. Sellers are very likely to reject anyone who they think might be ‘playing the game’ and have the potential to cause issues during the sale.
Another thing to consider is looking at properties that are a little below your budget; this will give you some wiggle room for increasing your offer if necessary. You should also consider widening your search if you have narrowed it to a very specific location. With properties in high demand, you might have to take a more realistic approach to where you want to move to.
However, you should avoid a bidding war – this can inflate prices artificially and could lead to you paying more than the property is realistically worth.
Additionally, you could also think about the emotion that is invested in selling a property – for those selling their first home, or a family home, it’s about more than money. They will be looking for someone who will love that property as much as they do. When making an offer, you might want to think about tapping into that by sending a letter explaining why you want their home – maybe you are planning on starting a family or have loved the house and the area for a long time or have family connections there.
It’s also worth finding out why they are moving – if they need to move away for a new job, or because they are splitting up – you might be able to seal the deal with an offer to complete by a certain date.
These factors may be worth more to a vendor than a prospective buyer with a few thousand extra pounds in their bank account, But if you do think you are being drawn into a bidding war, stay calm. Agree on your upper limit and don’t be tempted to push over it. Remember that the estate agent is working for the vendor not you – and a higher sale value will result in more commission for them. Don’t reveal too much to the estate agent – if they know you are desperate to buy the house, they may convince the vendor that you will up your offer. And if you are told that there are other offers on the table – ask to see proof.
At the end of the day, making yourself stand out as a good prospective buyer with all your finances organised and ready to go will give you a greater chance of having your offer accepted.
If you would like to discuss mortgages or any other financial matter, J Finance will be happy to help. Please contact us without obligation.
Established in Berkshire in 2004, J Finance Ltd is one of the leading financial planning companies in the area. We serve clients across England and Wales. If you would like to discuss this subject or any other financial matter, please contact us on 01635 521 300 or email firstname.lastname@example.org.
YOUR MORTGAGE IS SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.