In a seller’s market, purchasing a home takes a bit of luck, planning and smart strategy for positioning yourself ahead of other buyers. It’s not unusual for a new listing to go under contract over the asking price the same day it’s listed, giving sellers the upper hand in negotiations.

Even in an environment of low inventory, escalating home prices and bidding wars, buyers can develop a competitive edge by starting with a few simple steps right from the beginning. If you’re thinking of buying a home right now, consider the following:

Check your credit score. Credit history and your current score could determine how you measure up against other buyers. The general rule of thumb is that the higher your credit score, the better chances you have at qualifying for credit and receiving the best rates. Fix any errors, even the small ones like accounts you previously thought you closed, as they will impact your total score. Plus, when you do build up your credit score, you’ll be able to enjoy many other financial milestones.

Look for a lender to get pre-approved. Preapproval gives you an idea of how much home you can afford based on how much money a lender is prepared to let you borrow. Purchasing a home is an expensive undertaking and you’ll need to plan out your entire budget well before you consider moving toward buying a home. Mortgage brokers and lenders can be a big help in guiding you through any unexpected costs and determining what your closing costs could look like. It’s also a good idea to get an approval letter from the lender. You will submit this with any offers you make.

Widen your search area and expectations. Because the supply of houses is low in a seller’s market, you may not be able to find the dream home you’re looking for in your ideal neighborhood. You may need to adjust your expectations and review your wish list. It can help to broaden the area you’re searching in so that there are more homes for you to choose from.

Be flexible if you can. Sellers don’t want people coming through their homes during all hours of the day and night, so try to be available when they are. And when it comes to move-in dates, listen to what the seller needs. In a competitive market, you might see other buyers removing or reducing their contingency periods to make their offer more competitive.

Make a personal case for your offer. It doesn’t hurt to reach out to sellers in a letter, or personal note explaining why you’re the perfect buyer for the home. Sometimes this personal touch can make all the difference and set your offer apart from the others.

Avoid additional requests and favors. This is not the time to ask for additional exclusions or personal property that belong to the seller which will only weaken your offer. There will most likely be another buyer who is willing to offer the full asking price with no additional requests of the seller. Be prepared to accept what they are offering up front.

Consider covering all the seller’s closing costs. Seller closing costs consist of various fees ranging from the agent commission to HOA fees to title insurance. Buyers today are often covering both the buy- and sell-side closing costs to entice sellers. If there are other hidden fees you can cover for your prospective seller – such as home repairs – this may give you another edge.

Consider offering more than the asking price. Depending on the market, some homes are selling for well over asking price. You may need to offer more than the list price and waive all contingencies in order to win in the most competitive markets.

It can feel overwhelming shopping for a home during a sellers market, but don’t be discouraged. As always, we’re available to answer all your home financing questions and would be happy to discuss options that may work best for you! Call 216.387.1003 or complete our easy online enquiry form and tell us a little about your situation. We also offer a free Renters Workshop which provides participants with an overview of the home buying process.

Myths about today's housing market