If you’ve been following the real estate market here on the islands, you’ve seen a trend over the past six months of reduced inventory for our lower priced homes… especially with the single family homes and condos on Sanibel Island. Sanibel homes for sale under $600k are in what we considered a “Seller’s Market” meaning that Sellers are less motivated to discount their properties.
A Seller’s Market occurs when the number of months inventory of homes is less than six months – meaning if no more homes came on the market in that price point, the inventory of current homes would run-out within six months or less.
As the name indicates, seller’s have a slight advantage when their home is listed during a Seller’s Market, since there’s often more buyers than homes available on the market. I’m not trying to dissuade buyers from purchasing a home during a “Seller’s Market.” In fact, it could be a great time to buy because home values are generally appreciating. However, I’ve seen buyers make common mistakes that have resulted in them missing out on the home of their dreams! To help avoid this scenario, I’ve listed some of the common mistakes that buyer’s make in a Seller’s Market.
8 Buyer Mistakes in a Seller’s Market
#1 – Not Being Ready and “On-Call”
When a market is HOT, meaning properties are moving quickly from “just listed” to “under contract” within a matter of days or even hours in some cases, you have to be ready to pounce on a good opportunity as soon as it hits the market. When you get that email or phone call about the perfect home for you, don’t wait to look at it when you get home. You must have an “on call” mindset or you could miss out!
#2 – Not Getting Pre-Approved
If you’re taking out a mortgage for your home purchase, it’s important to be pre-approved by your lender. NOTE: Pre-Approved is different than Pre-Qualified! While pre-qualified shows the amount you could obtain in a loan, pre-approved means the lender is ready and willing to give you this amount – meaning you can act more quickly!
#3 – Waiting To Make An Offer
Being ready and “on call” sometimes means not seeing the property for yourself before making an offer. Gasp! Yes, people do this, and we make it as painless as possible by visiting the property for you, taking photos and videos, or even FaceTiming you for a personal walkthrough. Making an offer kicks-off the home buying process, allowing you time to come and view the property without the fear of it going under contract before you can see it.
#4 – Not Making Your Best Offer
Not only is it important to make an offer quickly, but even more important to make a good, strong offer. In a Seller’s Market, there’s no time for what I call “low-ball” offers. Most sellers, especially here on Sanibel, have the luxury of waiting to get the price they want, not to mention they could receive multiple offers at one time. Therefore, you should present your best initial offer, giving the seller a reason to work with your offer over another.
#5 – Not Being Prepared to Negotiate
After the offer comes the negotiations. This is where you make or break the deal – literally! While buying a home is certainly an emotional experience, so is selling a home – especially one that you’ve has many years of happy memories, which is the case for a number of Sanibel home-sellers. Keep an open mind during negotiations and work with your Realtor® to come to an agreement.
#6 – Not Choosing a Seasoned Realtor®
Speaking of Realtors®, now is a good time to mention the importance of selecting an experienced agent whom is working in your best interest to get you the best home for the best price. Don’t make the mistake of choosing an agent who isn’t familiar with the process or is a poor negotiator. It could lose you the deal!
#7 – Expecting a “Great Deal”
Sorry to break it to you like this… but “great deals” don’t often exist in a Seller’s Market, unless the homeowner is highly motivated to sell quickly. The words GREAT DEAL in themselves are very subjective. In a market on the rise, most purchases look like a “great deal” a year or two after the transaction.
#8 – Not Accepting Set-Backs
In a Seller’s Market, nothing is guaranteed, so it’s possible that your offer could be rejected by the seller, or worse, another buyer beats you to the chase! It’s important to not allow these set-backs to take you out of the game completely. Both you and your agent have to bounce back, learn from your mistakes, and continue on what can be a fun, long, exhausting, and exciting journey in finding the perfect island home.