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Buying in a Seller's Market in 2022

We are still in a "Seller's Market" in real estate. We are actually in a seller's market period. We bought a new car this year and the dealership wouldn't budge on the price or even throw in a set of floor mats, free oil change, one of those stinky trees that hangs from the rearview. Nothing. Zip. Nada... It was an enlightening experience for us not only because we negotiate for a living but because it really shined a light on the reality of what's happening on a global scale. I don't want to go down the rabbit hole of supply chain issues but it's important to at least mention that this isn't only a real estate crisis we are currently experiencing.

If you're in the market to buy a house right now you may have felt the pain of losing out on a multiple offer, of being told "No" again and again. God forbid you have contingencies: You have to do bank financing or want to have an actual building inspection. OR, the absolute nail in the coffin, you have to sell a house before you can buy another house which means you need to get a seller to agree to that contingency. Yikes! Three years ago these were all contingencies that we expected to see on an offer. Today, these contingencies are becoming more and more rare. We are seeing cash offers, no inspections, no house to sell, letting the seller decide when they want to close and letting the seller stay in the house after closing for an extended period of time rent free (we'll talk about all of this in our next blog post).

If this sounds abysmal to you, you're not alone. Buyers have been feeling defeated for months now which is the motivation behind this particular post. If you're in this situation and you're throwing up your hands we'd like to provide a few tips that might help you "win" your next offer:

  1. DO: Make sure you're working with a good Buyer's agent. A good Buyer's agent will coach you ahead of time and put you in the best possible position possible based on your particular set of circumstances. DON'T: Find a house you like, click the button on Zillow to speak with an agent and expect to buy that house before you've done any pre work. First of all, you have no idea who the agent is who is answering the phone. It's whomever is next in line and whomever can answer their phone the fastest because that call also went to five other random agents. Second of all, you need a Buyer's agent you know, like and trust.

  2. DO: Call the bank whether you're getting a loan or paying cash. If you need a loan you have to be pre-approved, if you're paying cash you need to be able to provide proof of those funds which sometimes takes a lot longer than you'd expect. You want to be armed with as much information as possible to make the seller confident that you can afford their house. DON'T: Think that refinancing your current house means you're paying cash if you haven't already secured those funds. Also, if the cash is in your mattress of under a floorboard a photo won't do as proof of funds. Ask me how I know this.

  3. DO: Be ready to react quickly when a good house candidate becomes available. Be as flexible as possible because showings book up quickly. DON'T: Expect that house to be available for a long time.

  4. DO: Make your offer as straight forward as possible with as few contingencies as you're humanly comfortable with. DON'T: Over complicate it. If you already have to make an offer with bank financing and you are not comfortable waiving the building inspection do not add in that you want the bedroom furniture to convey (unless it's being offered) or the washer and dryer must stay if the seller has clearly stated that they are being removed.

  5. DO: Give the seller some time to respond. DON'T: Make an offer with a 12 hour response time unless you absolutely need to know in 12 hours. An example of this would be if you're moving for a job that starts immediately and there are two houses you would buy. If the first one doesn't work out, you need to secure the second one and have only 12 hours to make that second offer.

  6. DO: Listen to what your agent advises. Put together your team ahead of time and make sure this is a team that works well together. Your agent will help connect you to the right loan officers, building inspectors, tradespeople, etc... DON'T: Wait until you've fallen in love with a house to start. These things take time and you want to be well prepared. If you're well prepared then a seller, and their agent will have more faith that you're the right person to say yes to because you've got your act together.

We hope these tips have been helpful. There are many more things that come up in the course of a transaction, these are just a few tips to get your juices flowing and hopefully set you on a path of success.

Currently three of our buyer clients have pre-sale contingencies and they are all under contract to buy new homes here in Maine. A lot of agents would bawk at this and say there's "No Way" we were able to get these buyers under contract with a pre-sale. Was it easy? Certainly not. There were many moving parts and pieces, other agents to convince our buyers were the best buyers for their clients' properties and a lot of prayers to the real estate Gods. The difference between our buyer clients and the others who are losing out on offers is that our clients were well prepared. At first they all thought there was no way they would be able to buy house in this market, having to sell the ones they currently own but we started early and helped them get their ducks in a row.

Oftentimes we are working with buyer clients for many months before they even start looking at houses, setting the stage and doing the pre-work. I like to think of it like painting a room. Have you ever been in a rush to slap a new coat of paint on a wall only for it to peel off, drip down the wall in gobs or look generally crappy? If you'd just cleaned the wall, spackled the holes, sanded and taped you would have a beautifully painted space. Do the work, it will pay off.

We are sending good vibes and hope you have luck in your search. If you're not in Midcoast Maine and need to find a solid buyer's agent, just ask us. We have contacts all around the country we are happy to connect you to. Nobody should have to navigate this market alone.

Peace out and happy hunting.

Alex and Tommy

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