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How Buyers Gain Advantage in a Seller’s Market

by: Scott Schang,

Trying to buy in today’s low inventory market takes time and patience and buyers can use every advantage they can get.

Buying a home is not like wandering onto a car lot and picking up the latest make and model from your favorite manufacturer.

The housing market is volatile, it’s unpredictable and it usually favors one party or the other, the seller in a “seller’s market”, the homebuyer in a “buyer’s market”.

2013 is a seller’s market. In a seller’s market, the advantage comes from a lack of homes available for sale, in a market where there are many buyers in the market.

In terms of supply and demand, high demand and low supply drive up home prices as buyers compete for the few available homes on the market.

As a homebuyer, just trying to find your dream home can be a daunting task. Once found, expect lots of competition and a possible bidding war.

There are three ways a homebuyer can gain an advantage in a seller’s market.

1. Get fully pre-approved for financing.
This is the very first thing any serious buyer needs to do. A pre-approval means that you provide the lender with the following:

• 2 years history of income along with verification of on-time payments.
• 2 years history of employment in the same line of work.
• 2 years of income documentation – W2’s or full tax returns if required.
• 30 days of most recent pay stubs for all borrowers.
• 60 days of most recent asset documentation showing enough money to cover all closing costs and down payment.
• Have credit pulled and reviewed by a licensed loan officer.

2. Hire a Real Estate Agent that understands the market.
A real estate agent that is very familiar with the communities and areas you want to buy in is vital in a seller’s market.

Seller’s markets move fast. As soon as a home goes on the market, buyers that have the most up to date information will snap it up.

A good real estate agent also has good relationships with the selling agents in the area and can sometimes hear about homes coming on the market before the rest of the public hears about it.

3. Buy a New Home From a Builder
Buying a new home from a trusted builder can be your one stop shop that rolls all of your competitive advantages into one.

Financing – Most builders have relationships with a mortgage lender that they know and trust. This makes for a smoother transaction and quicker approval and financing process.

Experienced Real Estate Agent – Builders have experienced real estate agents on staff that are intimately familiar with the models, amenities and communities offered by the builder.

Available Inventory – Being a seller’s market, builders are building. By pre-purchasing a brand new home in a developing community, you eliminate the bidding wars, the competition and the potentially high cost of maintenance that comes with purchasing a resale home.

In addition to the many competitive advantages that buying new construction offers, the ability to choose the style, amenities, upgrades, fixtures and features of a new home is something that buying resale simply cannot offer.

Brandywine Homes will open three new home communities in Southern California in 2013:

The Orchards in La Mirada – Mid October
A 41-home community on the site of the former Alondra Center

Waverly in West Covina – Mid October
A gated community of 19 single-family homes

Estates Pasadena in Pasadena – Early November
12 lots in the 2.2-acre Estates Pasadena community in East Pasadena

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