The Grand Rapids real estate market has been hot for the last few years with homes
selling quickly and for higher prices than in the past. With bidding wars, competing
buyers waiving contingencies, cash offers, and more, frustrated buyers can feel like
they’ll never get the home they want.
Don’t lose hope! There’s a house out there, just for you. To help you find it, we offer
the following tips for buying a home in a seller’s market.
Hire a buyer’s agent.
Of course I’m going to suggest that you hire a buyer’s agent, but listen: There’s
absolutely no downside a ton of upside! First of all, there’s little to no cost to you – the
seller pays the commission!
Furthermore, did you know that, in the state of Michigan, all agents represent the
seller unless they’re under contract with a buyer? That means that if you don’t have
a contract with Brooke Marie Collective, we can’t tell you anything we see that’s not disclosed from the seller.
But when you hire Brooke Marie Collective as your buyer’s agent, we’ll tell you all of
that and more!
The moral of this story is…
You especially don’t want to find yourself in the position of “Mr. Buyer”, who didn’t
work with a buyer’s agent because he thought he’d have to pay a commission and
could handle the negotiations himself.
Mr. Buyer allowed the listing agent to show him a house he’d seen online. Do you
know whom the listing agent represents? The seller, of course! In a seller’s market,
this can be disastrous for a buyer without representation.
It’s the listing agent’s fiduciary responsibility to get the seller the best price she can
for the house. In this case, after submitting several bids, Mr. Buyer substantially
overpaid for the home, an unfortunate mistake he could’ve avoided with
It’s worth repeating—Step one: Consult and sign a contract with a buyer’s agent!
Have a back-up plan. In a seller’s market, it’s very likely that the sellers will ask to delay possession until some time after closing. In this case, you’ll want to have a back up plan regarding where you’ll live in the interim period between closing and moving in. A buyer’s agent should discuss your back up plan with you well before making an offer.
Don’t Just Stick to Your Budget – Go Low
The listing price in a seller’s market can be folly—more of a starting point than
anything else. When bidding wars happen, homes often sell for quite a bit above the
listing price, leaving buyers frustrated. Instead of looking at homes in the top of your
budget range, leave yourself room to negotiate by looking at homes that cost a little
less. You’ll encounter fewer frustrations and probably sleep better, too!
Be prepared to make multiple offers.
When homes are in short supply and selling quickly, multiple offers are probable. Be
prepared to make more than one offer, the final of which will most likely be above
the listing price.
High Hopes – Wait Until After the Inspection Report
The inspection report may reveal anything from torn window screens to a shaky
foundation or high radon levels. In a buyer’s market, you’d expect the seller to fix
any of those things, even something relatively small like the torn window screens.
In a seller’s market, that kind of request may lose you a home.
A buyer’s agent, who sees inspection reports on a regular basis and is familiar with
negotiating those elements, can advise you regarding which ones are worth asking
the seller to fix and which ones you’re better off fixing after you take possession.
More importantly, she can advise you whether it’s better to walk away from the
purchase, even if you think it’s the home of your dreams.
Buying in a seller’s market can be tricky. When you hire a buyer’s agent, our job is to
get you the best deal possible. I believe our guidance is just as important as our
negotiation skills in a market where bidding wars and inspection wavers are
Another important way I guide my clients is by advising them not to become
emotionally attached to a home before they have a purchase agreement. Although
this can be difficult when you see a house you love, my goal is to protect my clients
from becoming desperate buyers.
Desperate buyers overpay, sometimes substantially, like Mr. Buyer in the above
example. When you overpay, or agree to buy a home in need of costly repairs, it’s
unlikely that you’ll ever recoup that money.
As hard as it can be, sometimes it’s better to pass on a house you’re longing to call
home. But you’ll eventually find another house that’s the right home for you. I know
it sounds like a cliché, but it’s true. I see it happen all the time. Somehow it always
works out the way it’s supposed to!