Brokers’ Tips for Buyers in a Seller’s Market

Brokers’ Tips for Buyers in a Seller’s Market

Just like summer in the South, Alabama’s real estate market is sizzling hot and showing no real signs of cooling down as buyers literally compete for homes as soon as they hit the market. From all-cash offers to persuasion letters, every tactic is on the table in an extreme seller’s market.

The temperature of the market is fueled by a combination of low interest rates, low inventory, and higher building costs. Realtors® representing both buyers and sellers are using their best strategies to help clients navigate the new territory of multiple offers, bidding wars, and short closing windows. AAR called on three Alabama brokers for their best advice to buyers in a market as hot as a habanero pepper.


Carol Andrews


Qualifying Broker, House & Home Real Estate

Carol Andrews has never seen a home buying environment quite like this one. She advises her clients to be like a Boy Scout – prepared. Andrews advises her clients to:

  • Be preapproved by a reputable lender  
  • Be prepared to pay over listing price
  • Be prepared to cover all closing costs
  • Be prepared to pay the difference in appraisal value and contract price
  • Be prepared to close in 30 days

Andrews calls mortgage preapproval a must-have. “I tell everyone I am writing offers for that there’s no way to compete without preapproval.” Andrews also suggests offering more earnest money to make an offer stronger. “Some buyers are even offering non-refundable earnest money,” she explains.

Other tools like “love letters” to the seller may have more risk than reward. “The Alabama Real Estate Commission is not crazy about them,” says Andrews, “and Oregon made them unlawful because they have the potential to violate Fair Housing laws. I try to give buyers guidelines if they write a letter. Don’t mention the church you attend or the private school next door. I’m also trying to educate my agents.”

Andrews says cash offers are more common today and give those homebuyers an edge over the competition. The current market is tough for first-time homebuyers who often lack ample cash to sweeten deals or rely on near 100 percent mortgage financing through VA loans. “Those buyers usually have less money and expect sellers to pay closing costs,” Andrews says. “No seller is paying closing costs right now.” 

The most unusual tactic Andrews has experienced is an offer without a home inspection. “As a buyer’s agent, it’s not recommended at all,” she says. You don’t know what kind of liability you will assume and we no longer ask sellers for home warranties.”

To give her clients an edge, Andrews calls agents who list in a neighborhood to see if they have something coming that’s not yet on the market.



Timothy Mills


Senior Broker Associate, The Cummings Company

“It’s all about education, education, education,” says Timothy Mills. “The first piece is finding a competent real estate professional. The second is consulting with the client and explaining the environment and where we are in terms of the market. Once you do that and learn what the expectations are, you are able to flush out whether they really understand their financial situation – and that’s the key because, going in, we may get only one opportunity to make a solid offer.”

Mills says lower interest rates may tempt buyers to offer more than they can afford and be happy. “Interest rates may be lower, but prices are higher meaning the out-of-pocket expenses are higher,” he says. “A 20 percent down payment on 2020’s median price of $280,000 is $56,000, but for the 2021 median of $320,000 the down payment is $64,000. Can you afford the extra out-of-pocket? And before, sellers often paid some closing costs and prepaid expenses – no one is doing that now.”

Education also means managing rejection. “I tell my clients to be realistic and stand firm. The right house is out there,” says Mills. “If everything is in line – finance and lender – it’s just a matter of time before you get the right one.” 

“I also tell clients to remember that there may be a higher offer, but the quality of the offer is important, too. Cash offers are usually more attractive than those who have to go through lenders.”


Richard Grimes


CEO, RealtySouth

“The key,” says Richard Grimes, “is being a prepared buyer. We can’t all be cash buyers -- that’s the most prepared and aggressive – but we can all prepare. That’s why having a Realtor® is key to preparing the buyer for the most aggressive market we’ve ever witnessed. It’s not rocket science; it's professionalism and being prepared.”

“Assuming you're going to have a 30-year mortgage like most humans, be completely underwritten on your loan before looking for a house,” Grimes advises. “Not all lenders can approve you to underwriting.” His company’s affiliated lender saw the competitive climate for buyers and pivoted to the needs of the market. 

Grimes says it takes about two weeks to prepare a client so they will be head-to-head with a cash buyer. “You’ve got to up your player score. We know how to do it, and we do it every day. It is education and preparation and leveling the playing field.” 

Though first-time homebuyers and VA buyers may have less cash, Grimes says he can walk them through the same process. “We can’t make them have more cash, but we can make them prepared to compete with what they have.” 

“As we’ve seen through history, our Realtor® community is really good at pivoting. This market is just a different set of challenges. I think it puts our Realtor® community in a great place and shows our value long term.”


Want more tips?

Hear more from Andrews, Mills, and Grimes on the flipside of this topic - Controlling Seller Expectations - at the Alabama Realtors® Annual Conference October 18-20 at Marriott’s Grand Hotel in Point Clear. Register here.