Today's sellers' market looks set to continue. But what does this mean in practical terms if you're looking to buy a home this year and how can you put yourself at the front of the buyers queue?
Today’s “sellers’ market” explained
According to Rightmove earlier this month, the average estate agent branch had just 12 properties for sale as the national drought in new homes coming to market continued. This all time low accompanied by strong demand are the perfect conditions for a housing market frenzy and further house price growth. This has led to record house prices, with some regions rising at “unsustainable” rates, Rightmove warned.
Rightmove also reported that the average time to find a buyer was two weeks shorter in Dec 2021 compared with the previous year.
Good news for prospective home buyers comes with early signs that more property choice is on its way. Rightmove reported that the first working week of 2022 was the busiest start of the year ever for people requesting agents to come out and value their homes, 44% up on the same period last year, and 48% up on the same period in 2020.
While we wait to see if more properties come to market, here are some tips for home buyers in a sellers’ market.
Tips for buyers in a seller’s market
If you’re buying in this sellers’ market, don’t despair. Yes, competition is strong at the moment, but there are things you can do to strengthen your position…
Break the chain – sell before you buy
A long chain of buyers and sellers in a housing transaction often mean one thing: delays. That’s why chain-free buyers that don’t have a property they are waiting to sell, often get to the front of the buyers queue. Selling before you buy also means you’re likely to be able to move more quickly and less likely to get gazumped.
We are hearing from an increasing number of homeowners opting to sell first and move into rented accommodation or back to their parents so they can take their time looking for their next property.
Bridging loans have also received increased attention on our site in the last six months from people looking for temporary funding solutions to enable them to buy their new home before they have sold their existing property. But bridging loans do come with risks so read our guide on how bridging loans work.
Be proactive – make connections
With a shortage of homes available for sale, many of the best houses and flats are sold before they even reach the market. So, it’s really important to establish relationships with local estate agents in your search area and show them you are a serious buyer in a good position. That way, you’ll be first to know about new properties. Read more about how to get to the front of the buyer’s queue.
Act quickly
With lots of competition between buyers, the risk of being gazumped also increases, so you need to act quickly once your offer is accepted. Securing your mortgage agreement in principle before you start your search will put you in a stronger position, as will finding a conveyancer to ensure you get all of your ID checks done in advance. Knowing you can afford their property and won’t delay the process with applications and solicitor searches makes you a more reliable buyer. The same applies for getting your surveyor ready to go. Get and compare quotes from local surveyors in advance.
Prepare for sealed bids
In the first quarter of 2021, 36% of sellers received offers from three or more buyers. That trend has seemingly continued through 2021 and doesn’t look set to stop with demand for such few properties on the market. Prepare yourself for a bidding war. Our guide on sealed bids – or best and final offer as it is sometimes called – explains everything you need to know about tactics.
Be careful not to pay too much
With prices already inflated in a sellers’ market, making sure you don’t pay over the odds and sticking to your budget is vital. But with competition high, it’s also important not to underbid. So make sure you do your research and check you’re not paying too much for the property. To find out how much other houses in the same area or street have sold for in the past, the best website is the Land Registry.
Find out more about making an offer and how to haggle.
Get help from a Buying Agent
Buying agents can find you the house of your dreams, even if it’s not on the market, and negotiate the best possible price. They’re particularly helpful in today’s sellers’ market. Read more about buying agents, how they work, their fee structure and to find a list of buying agents around the country.
Comments