Buying and selling in a one-sided market

by Elizabeth Schultz

You can make big profits on the sale of your home right now thanks to a lack of housing inventory and a backlog of buyers just waiting in line to buy your home. We are seeing an influx of buyers coming in from other states and cities looking to move to the suburbs.

But if you’re looking to trade up or downsize once you sell, the same thing that will have made it so easy for you to have sold your home will make it difficult for you to find your next one: a lack of inventory. Your best bet right now, if possible, is to sell your home and capitalize on the market as it stands today and rent until you can purchase your next home. This puts you in a much better bargaining position to win a bid in a market that is putting all buyers in stiff competition resulting in bidding wars.

A good way to protect yourself is to have the sale of your home “subject to suitable housing.” In today’s market you will find a buyer who will be willing to wait for you to find a home, but again, it may be hard to compete against a buyer who has nothing to sell. Therefore, you should not be looking at homes until you have your home on the market or buyer in place before you think about putting a bid on another home, unless you can purchase without selling first. There are just too many strong buyers out there with nothing to sell.

If you have the luxury to temporarily stay with a relative or friend after your sale while looking for a home that is also a great option.

Sellers: Your best bet is capitalize on the market as it stands today and rent until you can purchase your next home

There are many ways to get to where you want to be. It is important to hire an experienced Realtor® who can navigate you through all the twists and turns of selling and buying. And, most importantly, to make sure you and your interests are protected along the way.

Buyers:

You know by now it is a very tough market with limited inventory and fierce bidding wars. I am sure you have heard the very first thing an agent ask you is if you are preapproved. We do not want to waste your time or anyone else’s! Before you can say, “I like this house” it is gone! You must be prepared in this market by being fully preapproved. It is the most important first step before you begin your search.

What does fully preapproved mean? This means providing a bank or mortgage company with all documents requested. For example, W2’s, tax returns, pay stubs, and bank account statements. This up-front work will save you tears and heartache in the future if your deal falls apart, which no one want to have happen.

Buyers: Get fully pre-approved before you start shopping

Once you are fully preapproved, it’s time to go shopping. Find an experienced Realtor® to help you. They are experts on current market conditions, they know what pitfalls to watch out for and they can advise you on the best way to approach an offer on a home. In short, they have your back and can also connect you to trusted partners if needed, such as mortgage brokers, real estate attorneys, inspectors, insurance agents, and more. A good Realtor® will educate you in the process so there are no surprises along the way.

Be patient. This market is tough for buyers. You will lose out on several homes but don’t give up! Your house is out there, and I am a believer everything happens for a reason and you will end up where you should be. It will be a wild ride in real estate this year so buckle up! I promise it will be worth it in the end! Happy spring house hunting!

Elizabeth Schultz is a real estate broker and owner of Avenue 5 Real Estate located in Tiverton, RI and is licensed in both RI and MA, as well as a member of the National Association of Realtors. She can be reached at lizschultz220@gmail.com.