Thanks in large part to our current pandemic situation, there is a broad flight from living in urban areas to suburban and rural areas. This has led to an increased demand for single family homes, exacerbated further by a decrease in housing supply as homeowners, leary to allow strangers in their homes, are reluctant to list their homes. The end result is a sellers market; some may say a severe sellers market.
All of this begs the question, how does a home buyer acquire a home (or homes) without simply succumbing to the sellers price? Fortunately, there are a few things that one might do, some “tricks” you might say, to make the most of what some might say is a less than advantageous negotiating position.
- Align with a realtor from the best broker.
As I’ve mentioned before, realtors wield immense power and influence. One such power, in some areas, is the pocket listing. By aligning with the best broker (as measured by the number of open and closed listing in the area where you’re looking to buy a home), you give yourself access to the greatest pool of pocket listings.
Pocket listings are a home listing that hasn’t hit the Multiple Listing Service (the “MLS”), the public listing of homes for sale.
In a seller’s market, having access to homes before they become openly available to the general public can be a tremendous advantage. And aligning with the best broker is your ticket to that offering.
- Join forces with the selling agent.
In a traditional sale, the buyer and the seller’s real estate agent share the commission. When a seller’s real estate agent bring a buyer, that agent potentially doubles their commission.
By aligning with the seller’s real estate agent and having them represent you in the purchase, you instantly make your offer more attractive to someone who might arguably be the most influential person in any real estate transaction … the seller’s real estate agent.
- Be open to being the back up offer.
A real estate deal isn’t finalized until escrow closes. And the journey between an accepted offer and the close of escrow is fraught with potential pitfalls. In a seller’s market, being a backup offer is almost as powerful as being the primary offer.
- Take on someone else’s problem.
Some of my most successful real estate deals have been when I’ve was willing to take on a problem that the seller didn’t want to address. Deals like this have an added benefit of discouraging potential competitors from creating a price war.
- Be patient.
Most importantly, be patient. Clearly identify all of your criteria, and wait until they are met. Once met, be ready to strike with determination and conviction. Have your financing secured, and be prepared to utilize it. No one ever made money by chasing the wrong deal.