Top Tips for Buying in a Seller's Market

Top Tips for Buying in a Seller's Market

You’re eager to buy a home this year but there is so much competition that sellers can cherry-pick from a sea of offers. What can you do to secure the home of your dreams?

Buying in a sellers’ market can be tough. But there are things you can do to improve the chances of your offer being accepted.

What’s the Difference Between a Buyers’ and a Sellers’ Market?

In a buyers’ market, there are more properties for sale than people looking to buy.

This puts house buyers in a stronger position than sellers because they have plenty of properties to choose from, so rarely need to compromise on their budget or buying conditions. If the seller does not agree to their requests, the buyer can move on to the next property on their viewing list. 

In this type of market, house prices typically fall, and sellers are often forced to negotiate so buyers can snap up a bargain.

In a sellers’ market, demand for properties exceeds supply. There are more people wanting to buy than there are houses on the market.

Sellers are better positioned than buyers because they are more likely to have multiple offers on the table. And even if they don’t, they can confidently turn down an unappealing offer knowing there is a queue of eager buyers lined up ready to view.

In this type of market, homes typically sell faster, and prices rise. There may be bidding wars as buyers offer above a property’s market value in desperation to secure their new home. Buyers may also be willing to overlook problems with the property or the neighbourhood. All of this is great news for sellers who can hold out for their perfect offer from a dream buyer. 

If you’re stuck in a buyers’ market and are struggling to sell your house, download our guide, 10 Ways to Sell Your House Fast in 2021 or contact us for a free, no-obligation cash offer.

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Download our Guide on 10 Ways to Sell Your House Fast

Is It a Buyers or a Sellers Market Right Now in the UK?

The housing market has boomed since the first COVID-induced lockdown ended in May 2020. Buyer demand has outstripped supply consistently, sending house prices to record levels.

The current average house price in the UK is £265,312, approximately 21% higher than before the coronavirus pandemic began in early 2020. Many properties sell within a day, and some have sold even before they hit the market. The number of down valuations — when a mortgage lender’s surveyor values a house at less than the sale price agreed between the buyer and the seller — has soared in the past 18 months, a sure sign that buyers are being forced to offer above market value due to fierce competition. 

However, prices are expected to cool this year due to interest rates rising (making mortgages more expensive) and more properties coming onto the market. Property experts are predicting that the housing market will begin to level out and return to a less frenetic pace where there is more of a balance between buyers and sellers. 

And no matter what kind of market it is, an on-market sale is never guaranteed for either the seller or the buyer. One in four house sales fall through, costing UK homebuyers £607m a year.

If you need a quick house sale that is guaranteed to complete in a time scale of your choosing, talk to our house-buying experts today!

Tips for House Buyers in a Sellers’ Market

  • Act Fast

There’s likely to be a lot of competition for any house you make an offer on in a sellers’ market. You’ll need to act fast once your offer is accepted to avoid being gazumped — this is when a seller accepts an offer and subsequently rejects it in favour of a new, higher offer. 

If you need a mortgage to buy, getting an agreement in principle before you start house hunting will put you in the best position to move fast if you decide to make an offer on a property. Some estate agents will only accept “qualified” offers on behalf of the seller, which means that if you do not have an AIP to prove that you are in a position to buy the property, you cannot offer. This is especially true in a sellers’ market.

Instructing a solicitor to conduct the essential ID checks before finding a house can also speed up the process and make you a more appealing prospect to sellers.

  • Make Friends with Local Estate Agents

At the peak of the post-COVID lockdown buying frenzy, many properties were being sold before they hit the market. The best way to be one of the first to know about these opportunities is to befriend your local estate agents. Some sellers want a discreet sale, and their estate agents will only share the details with buyers they trust. If your local agents know what you’re looking for and that you’re in a strong position to buy, they may let you know about a new property soon to hit the market before many other people know about it.

  • Make Yourself a Chain-Free Buyer

If you have a property to sell, consider selling and moving into rented accommodation before beginning your property search. A chain-free buyer is a much more appealing proposition to a seller than someone who has yet to sell their property because there is no risk of property-chain problems, and you are ready to move fast.

House Buyer Bureau can buy your property for cash in as little as 7 days. Put yourself in the strongest position as a buyer — sell your house now and become a chain-free buyer. 

  • Be Prepared for a Bidding War

Strong competition between buyers increases the chance of a bidding war. In the first quarter of 2021, 36% of residential properties on the market received offers from three or more buyers. And in Scotland, the figure hit 65%.

To stand the best chance of winning a bidding war, a buyer must be ready to move forward with the house sale as soon as their offer has been accepted. A chain-free buyer will be more attractive to a seller than someone who still has their home to sell. And beware of the risk of gazumping. Until contracts have been exchanged on a property, either party can withdraw from the sale. Keep things running smoothly and quickly to reduce the chances of your seller accepting a new offer.

  • Learn How Sealed Bids Work

In a competitive market, an ambitious seller might invite sealed bids as this can result in a higher sale price than the traditional process whereby buyers can submit offers whenever they choose, and the seller considers them as they come in. 

When a house is sold via sealed bids, it is marketed with an asking price in the same way as a traditional sale, but potential buyers must submit their maximum bid in a sealed envelope without knowing how much their competitors have offered. Once the deadline for offers has passed, the seller opens the bids and chooses which one to accept.

Before entering a sealed bidding process, research the value of the property you want to buy, calculate your maximum budget and stick to it. Buyers are often tempted to overstretch themselves to beat the competition. It’s also a good idea to communicate with the seller directly as much as possible. By building a positive relationship with them, you stand more chance of your bid being the one they choose if there is little between the offers they receive. Finally, don’t bid a round number to avoid making the same offer as someone else. For example, offer £315,050 instead of £315,000.

  • Set a Maximum Budget and Stick to It

As mentioned above, it can be tempting to offer more than you can afford when competition for properties is fierce. However, this can backfire. If you make an offer that exceeds your budget, you could subsequently fail to secure the mortgage you need or find yourself struggling to pay the bills each month.

Calculate your income and outgoings and set a realistic budget — then stick to it! You may lose out on a property you like to a higher bidder, but there are always new homes coming onto the market. Better to wait for one you can comfortably afford.

  • Be Willing to Compromise

Accept that you’re at a disadvantage as a buyer in a sellers’ market. You’ll probably have to compromise either on the amount you are willing to pay for a home or on your wish list of property features. You may also need to be flexible on matters such as when contracts will be exchanged and what fixtures and fittings are included in the sale. 

If you’re determined to move and can’t wait for the market to cool, deciding what is non-negotiable and what you can compromise on will help you act fast when the right property comes on to the market.

  • Don’t Give Up!

Don’t be tempted to go for a house that you’re half-hearted about and perhaps wouldn’t offer on if there was less competition. Buying a house is a huge financial commitment — you could be paying off the mortgage for the next 30 years. 

It may take time and potentially numerous failed attempts, but there are always new opportunities to buy, and you will eventually succeed in buying a property that suits your needs and preferences.

Put yourself in the strongest position as a buyer. Sell your house fast to House Buyer Bureau and become a chain-free buyer. We have the funds to buy your property in as little as 7 days or a time scale that suits you. Get your free, no-obligation cash offer today.

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