How to Buy a House in a Hot Market
Updated August 4, 2021 . AmFam Team
While some say there’s never a wrong time to invest in a home, it’s important to be aware that home buying strategies and tactics can change depending on the market. Buying a home in a hot seller's market can be especially tricky — but with a little patience, preparation and flexibility, you’ll be turning the key to the home of your dreams in no time.
We’ve broken down what a seller's market is, how to compete in it and other tips for buying a home so you can head into your search with confidence — no matter what kind of market you’re in.
What Is a Seller’s Market?
In a seller’s market, home inventory is low and demand is high, which means that some homes might be on the market for just a few hours before receiving multiple competitive bids. As the name implies, this market favors sellers, as they can quickly sell their home at — or even above — asking price. In a seller’s market, it can be more difficult for buyers to stand out since sellers are flooded with offers.
You’ve found the perfect home — now you just need to close the deal! Here are some tips to help you submit a strong offer that has the best chance of getting accepted.
Submit your best offer up front
Submitting a full-price offer — or even over the asking price in some cases — will definitely get a seller’s attention. But solid offers with few contingencies can also get your offer noticed. Whatever your situation, starting with a strong offer is your best bet to score the win.
Offer with high cash earnest money
Earnest money, or “good faith” money, can give you extra leverage in winning a home in a hot real estate market. This is a deposit that’s submitted with the initial offer and is applied to the final sale price. Earnest money for a house or real estate purchase plays a special role in your offer, so it’s important to understand the rules that govern these types of financial transactions.
Consider contingencies carefully
It’s always important to have a home inspection before purchasing a home. However, you can stipulate that an inspection is only informational. This means that if the inspector finds minor issues during the inspection, you'll purchase the home without asking the seller to complete any repairs. Other contingencies can be waived to make a stronger offer, including financing, appraisal or a review of HOA documents.
Write a personal letter to the seller
While standing out in the market with financial incentives can be very effective, there are other ways outside of money that can help you seal the deal! For example, a heartfelt letter can mean a lot to someone who is parting ways with a home they love. Composing a personal letter describing who you are, why you love the house, how you’ll take care of it and how much it’d mean to you can make a big difference to a seller when they have multiple bids.
Prepare to Buy a Home in a Hot Market
Buying a home in a hot market can be challenging, but being prepared can improve your chances of landing your dream home! Part of being prepared is reviewing our home buying resources to help you navigate the process with ease. Then get a quote on home insurance (Opens in a new tab) from your American Family insurance agent (Opens in a new tab). Happy house hunting!
Related Articles
- 9 Steps to Create a Home Inventory for Insurance Claims
Your home is more than a roof over your head. It’s where your dreams grow, your family thrives and memories are made. But the possessions you keep inside are important, too.
Whether you’re renting an apartment or own your home, you’ve most likely got an insurance policy designed to protect your dwelling and the things inside. Should the unthinkable happen and you have to use that insurance policy, it’s important to have a plan in place. And a home inventory list is a great way to get started!
We’ll walk you through how to create a home inventory so — in the event of the unexpected — you’ll be more prepared and have a streamlined recovery.
What Is a Home Inventory?
Quite simply, a home inventory is a complete list of all the items, especially valuables, in and around your home. The best home inventories include photos, descriptions and dollar values of each of your belongings. The more detail, the better! It’ll help you provide a comprehensive list to your agent of items lost in the event your home is damaged or destroyed, allowing you to get the most out of your coverage.
When your describing the items in your list, remember that the more information, the better. Here’s a quick reference list of the type of information you should include in your home inventory list:
- An in-depth description of the items. For example, rather than writing down “diamond ring,” be more descriptive, such as: “an emerald cut diamond ring, with white gold shank, accent stones and initials inscribed below the bridge.”
- Make, model, and/or serial number of the items.
- Date of purchase, receipts and photos.
- Estimated replacement cost if you bought it today. Do note that the value of the items might be different today than it was when you first bought them. This is especially true with jewelry, and other valuables.
- Appraisals at time of purchase. Especially if your items were appraised for insurance purposes.
Why Do I Need a Home Inventory?
Whether you’re a homeowner or a renter, everyone can benefit from a home inventory!
If you ever have to make a claim, a home inventory is a great asset to have, especially after stressful events like theft, storm damage or a fire (take a look at how one renter used their home inventory after facing an apartment fire).
When you make a claim, you typically submit information on everything that was lost — which can be difficult to do off the top of your head for all your possessions. Remembering to replace your TV or computer are no-brainers, but when it comes to remembering each piece of jewelry in your jewelry box, things tend to get overlooked. Having a personal property inventory will help, along with knowing how to properly insure your jewelry.
When you have your home inventory checklist, you know exactly what needs to be replaced, and you’ll have peace of mind knowing your entire household is protected.
- Reasons Why a Roof Leaks
You’re admiring the rain from the comfort of your home when you notice a sound — the unmistakable drip of water dropping onto your floor. The first and hardest step is figuring out why your roof is leaking. And with these tips, you’ll find the culprit in no time!
Here’s Why Your Roof Is Leaking
The list of reasons why your roof is leaking may seem long, but don’t worry — when it comes to finding the leak and fixing it, the finding is the hardest part. And the good thing about these problems? They can all be fixed. Check out the list and see what’s troubling your roof:
Your roof is old
Roofs don’t last forever. Protecting your home and everything inside it from the elements comes with a cost. And with all that rain, snow, ice, wind and even sunlight wearing down your roof, it becomes more susceptible to leaks. Every roof will eventually need to be replaced, so learn more about how long your roof should last based on what it’s made of.
- How to Check Your Roof for Storm Damage
There’s no good time to find out your roof needs repair — but you may be able to mitigate that pain by routinely checking your roof for damage after severe weather. Waiting for a leak or damage to present itself gives the problem time to grow and worsen.
And sometimes, you’ll be faced with expensive roof and interior damage repairs if you’re not diligent. By being proactive and checking your roof for damage after severe weather hits can help your roof — and your savings — stay healthy.
