It’s a seller’s market in Charleston, SC right now – as it is in many other markets across the country – with inventory low and demand high. Coupled with high prices in the area, it’s definitely a challenging time to be a buyer in this market.
But that doesn’t mean you have no power when it comes to finding and purchasing your dream home in the Charleston area. Here’s what you can do to “win” as a buyer in a seller’s market.
Work with a Real Estate Agent
It’s always smart to work with a real estate agent (like me) when buying a home, but it’s even more important in a seller’s market. One reason is that your agent may know of properties that aren’t yet on the MLS but will soon go up for sale that might be a great fit for you. If your plan is to find your dream home on Zillow and then find a real estate agent to help you close the deal, you could miss out on some great properties, as they’re moving so fast.
Real estate agents also have relationships with other real estate agents, and having your agent maintain a dialogue with the listing agent through the negotiation process can strengthen your position in a seller’s market, too.
Find the Right Price
While a seller’s market does favor the seller, it doesn’t mean they can charge whatever they feel like. Work with your real estate agent to get the data that will help you determine a fair sales price for the property in the current market. That means looking at current inventory levels in the area and running a competitive price analysis for comparable properties that have sold very recently.
Get a pre-approval letter from your mortgage lender. You want to have this in hand when you make an offer so the seller knows you’re able to go through with the purchase.
Note that this is different from a pre-qualification letter; a pre-qualification letter is not as firm as a pre-approval letter, which typically involves a credit check and verification of your income and assets to determine how much you’re able to borrow.
Do Inspections Right
When it comes to inspections in a seller’s market, some buyers agree to buy the house “as is,” thereby eliminating the right to require repairs that come up during the inspection. I absolutely do not recommend this! If you win the bidding process, you could end up walking into a world of unknown repairs that are financially catastrophic.
Instead, I recommend using “repair procedure” inspection language in your contract. This obligates a seller to repair significant problems uncovered in an inspection but does not give the buyer the opportunity to walk from the deal as long as the seller handles the repairs. You may even want to cut down some non-significant categories of repairs within the repair language. This strategy can go a long way in making your offer more attractive to the seller without putting yourself at risk by buying the home “as is.”
Limiting contingencies can also make your offer more attractive to a seller. A home sale contingency is a common one, where the purchase is contingent on the buyers being able to sell their current home. Instead of including this contingency in your contract, look into options such as a bridge loan that will allow you to buy a new home now before your current one has sold.
It’s also common for home sales to be contingent on the buyer securing a mortgage. You can eliminate this contingency by making an “all cash” offer, if you’re financially able to do so. Cash offers are highly attractive to sellers as the home no longer has to be appraised by the bank. You can always get a mortgage to free up your cash after closing!
Include an Escalation Clause
If your budget allows for it, consider including an escalation clause, which tells the seller that you’re willing to raise your offer and go higher if other, higher bids come in from other parties. This shows you’re a serious buyer and can eliminate multiple escalating back-and-forth offers, saving everyone time.
Don’t “Wait and See”
In a hot market like Charleston, properties don’t last long. Be prepared to see homes as soon as they’re listed and make an offer quickly if it’s something you like. It helps to already have your list of wants and dealbreakers to help you make the decision.
Get help finding your dream home in the Charleston, SC area
Although inventory is low in the Charleston area right now, there are still many exceptional homes on the market and I’d love to help you find your dream home here. Seller’s market or buyer’s market, I’m here to help you with your real estate needs in the Charleston area, so call me at 843-806-7222 or mail me here. Let me know how I can help. I look forward to hearing from you.