When it comes to the real estate market, nothing is set in stone. There are times when the market swings in favor of the seller, and other times when it shows an advantage towards the buyer. If you are buying a home in Texas, you want to make sure you are doing so during a time where the market is playing to your advantage.
A homebuyer can get the most benefit when purchasing a home during a buyer’s market. Below, you’ll find out more information about what a buyer’s market is and how to take advantage of it in your local area.
Buyer’s Market Definition
The definition of a buyer’s market is this:
There are more sellers than buyers in the current housing market, so sellers may tend to be more competitive with their prices or requirements. The market is in favor of the buyers since there are fewer of them.
The market can turn into a buyer’s market for several reasons, including:
- Home prices are lower and there are more homes to go around.
- Homes are taking more than six months to sell or to be removed from the market.
- New construction projects build more houses without the guarantee that there are new buyers to fill them.
- Economic trends are shifting in or out of a specific area (for example, a major employer moves away which causes homeowners to move away).
An expert at Investopedia sums it up best:
Are You Experiencing a Buyer’s Market?
Before buying a home in Texas, you want to make sure that you are in a buyer’s market. Otherwise, you may have a more difficult time getting your offer accepted by a picky seller.
There are several ways to determine whether your current market is a buyer’s market. Here’s what you’ll want to do:
1. Find a Reliable Buyer’s Agent
Look for a real estate agent in your area who is experienced with helping buyers get the very best deals on the very best homes during a buyer’s market.
While the market is currently playing to your advantage, that doesn’t mean that you should navigate the complicated home buying process yourself.
t’s still important to consult with a professional who knows the market and who can access exclusive tools and resources to help you get the best deal.
2. Get a Good Look at Available Inventory
Take a look at what homes are for sale in your local area. Look at all the available listings in your ZIP code and your neighboring ZIP codes to get a good idea of what’s for sale.
You can also use this to determine the average price range for homes in your area. A search on this website is a good tool to use if you want to determine average inventory trends in your specific region.
3. Look at Interest Rates
If the market is truly favored toward buyers, then you’ll likely find lowered interest rates on mortgages.
This is a good indication that you should start looking for your dream home, as lower interest rates allow you to qualify for better home loans.
Lower interest rates are also ideal for first-time homebuyers who may otherwise not be able to afford to get into the housing market.
Benefit from the Results of a Buyer’s Market
Work with a professional buyer’s agent to determine the best time to start making offers on the homes you want. If the pool of buyers is shrinking, it’s the perfect time to make a move. When an economic shift occurs, the real estate market is one of the first industries to reflect the new changes.
For example, during a buyer’s market, home prices can drop significantly. At this point, sellers are desperate to get rid of their homes and move on, and they may even reduce their asking price or accept an offer that is lower than what they originally wanted.
Don’t Be Afraid to Ask For Contingencies!
As the buyer in a buyer’s market, you have much of the control. You can be in the driver’s seat when it comes to asking for contingencies as a part of your offer. This means you can make an offer that is contingent upon certain conditions that you determine. As an example, you can make an offer contingent upon the house being appraised at the price it was listed for.
You can also make an offer contingent upon you getting approved for your loan in the correct amount. That way, you’ll stay protected even after the offer closes. Don’t forget to go through with a home inspection and title report before signing any legally-binding contracts.
You may need to bite the bullet when it comes to paying for small fixes, though. The home may not be in perfect condition as per its low listing price, but you can front the costs for repair. In some cases, lenders will work with you to help you pay for minor fixes and other things that might cause you to offer less for the property upfront.
Start the Home Buying Process in Texas Today!
The volatile market can shift at any time. If you are currently in a buyer’s market, find an agent right away and start looking at the available inventory in your area. You can work with your agent and your lender to get a better idea of what you can expect financially.
After you find a home that you like and you are prepared to make an offer on it, work with your agent – and possibly with a legal representative as well – to make sure that every condition of the offer is being agreed upon.