5 common mistakes buyers must avoid in a seller’s market

The real estate market often fluctuates making it difficult to predict when the market

will turn into a buyer’s or seller’s market when you are ready to buy your home. Currently, the Indian real estate market is more of a buyer’s market as all major developers still have considerable unsold inventory to deal with. Combined with low numbers for the past three years, this buyer’s market is expected to last at least another few months. So if you are planning to begin your home buying journey in a few months, this article will take a look at how you can plan to avoid making some major mistakes. Making a lower price offer When people see listing price for a home, their first thought is often “Can I get it for a lower price?” However, making an offer of a lower price is logical only if the house is overpriced compared to similar homes in that locality or if it is a buyer’s market (with lots of unsold and available inventory). So making a lower price offer in a seller’s market may not be a good strategy if you really like the house because low inventory means fierce competition for the homes on offer. Over thinking the purchase price Do not get too worked up about the price or over analyzing it. Keep everything simple. Your first step, after you have figured out your budget range, is to shortlist the kind of home you want, your preferred location and your desired amenities. Sort out your credit issues; find out exactly how much you can actually afford and not what the bank thinks you can afford; and get a pre-approval if you can. Try to delay any other large purchases you have planned. If there is a house that you have fallen in love with, your ready financial situation will give you leverage with the seller as you can move the transaction forward quickly. Not being pre-approved from lender You might be confident that you will get a home loan based on your income and high credit score but the seller is probably not aware of that. So if you have liked a house and want to purchase it, the seller will be keen to move quickly on the transaction and if you are not pre-qualified or pre-approved for the loan, the seller might not want to wait. If you are pre-approved from a lender, it goes a long way in proving to the seller that you are serious about purchasing your home. Not prepared for a bidding war In a seller’s market, there is a good chance for you to get caught in a bidding war. As a buyer, a bidding war is not a good battle to be involved in due to the fear of going over budget. Therefore, as per experts, it might serve you well to go for a home slightly below your maximum budget so that it allows you room to manoeuvre in case of a bidding war. Not learning from your mistakes The key is to learn from all the times that your offers were declined. An expert once said that for first time buyers, buying a home is like dating. You will see some homes that you really loved slip through, you will be frustrated and sad but you have to dust yourself up and get back into house hunting with greater intent to buy up the next best home you find. Learn from your interactions with brokers, developers, lenders, and other buyers so that you can move in to your dream home.