Selling a home is a seller’s market is far different from selling a home in a buyer’s market. Not only will your days on market be remarkably fewer in a sellers’ market, but you might receive multiple offers, which could drive up the sales price.
It’s generally a good idea to take advantage of pent-up demand because it’s the demand that drives competition. The larger number of buyers for your home ought to increase the odds you’ll make more money. Some homes, especially those referred to as unique homes, meaning homes that can be difficult to sell in any real estate market, will generally stand a better chance of selling as well in a seller’s market.
Further, in some seller’s markets, the number of homes for sale might be few and far between. If there is not much to choose from, the nicest homes will attract the most attention.
Quality products sell fast:
“Seller’s market” does not necessarily mean that houses in undesirable locations or in poor condition sell quickly for a profit. Following the tried and true rules for improving curb appeal and prepping a home for sale will help you get a better return on your investment. Conversely, a bad appraisal or first impression can spoil your profit potential.
Start by having a trusted Realtor give you a professional market value of your home on today’s market. Then follow the advice laid out by This Old House and get rid of that stained carpet, refinish scratched wood floors, refresh interior paint, and fix peeling exterior paint or damaged siding to make a great impression on buyers. A little elbow grease goes a long way in a competitive seller’s market and usually translates to bigger returns.
‘The Price is Right:’
Don’t fall into the trap of over-pricing. Just because homes are selling fast doesn’t mean you can price as high as you want. “Inexpensive homes sell fastest,” says Trulia Housing Economist Ralph McLaughlin. According to McLaughlin, high prices may deter buyers before they even consider bidding or setting foot in the door.
Listing price can be a strategic marketing tool, so do a comparative market analysis of comparable homes in your area and pinpoint a price that buyers can’t resist. By pricing to sell, you can ideally attract multiple offers from qualified buyers and create a bidding war or make room to negotiate your own sale terms.
Timing is everything:
When the average turnaround on home sales is 60 days or less, you want to do everything you can to sell in that time frame. Make sure everything is primed for the sale in advance so that you can move quickly. Also, consider looking only at offers from people that have mortgage pre-approval to avoid going through contractual steps with unqualified buyers and delaying your sale.
Don’t be a holdout:
When confronted with a reasonable offer from a strong buyer, resist the urge to hold out for that imaginary “better offer.” Real estate markets can be fickle and your dream offer may never come, so if the price and timing are right, be prepared to take a good offer and run with it.
Keep in mind that just because it’s a seller’s market doesn’t mean your home will sell itself. Remember that buyers in any real estate market still care about buying reasonably-priced, quality homes, and with a little preparation and thoughtful presentation, you can position your home to sell quickly and make money.
Ways to Attract Multiple Offers in a Seller’s Market
Some people might think that all you have to do is stick a sign in the yard and let the market take care of the rest. It might be easier to sell in a seller’s market but it takes a lot more to sell a home than hanging a sign out front.
It requires strategy. Here is my strategy for home selling in a seller’s market:
- Prepare the home for sale. This may or may not involve home staging, but it absolutely should include cleaning the home from top to bottom. Buyers will overlook small defects in a seller’s market because there are not enough homes on the market — they have no choice. Your home will sell faster with new carpeting if the existing carpeting is worn, but generally, bad carpeting will not stop a buyer’s desire in a seller’s market. In fact, you might want to limit carpeting to the bedroom areas and consider a hardwood look elsewhere.
- Limit showings might work. People tend to want what they think they can’t have. Don’t let anybody tour your home at all hours of the day. Restrict the hours and the days. This will force some buyers to tour when other buyers are also present, which should spark a competitive nature.
- Lower the sales price. If you set the price a hair under market value, this will attract more buyers. It also will leave some wiggle room for buyers to begin bidding over the asking price. It is not necessary but is a strategy that works well in some markets.
- Do not set a time for offer presentation. If you let buyers know that you will review all offers on a certain day at a certain time, guaranteed, you will lose some buyers. Buyers do not want to wait to find out if their offer will be accepted. There is also a large pool of buyers who will say they do not want to be involved in multiple offers. By the time they find out, it’s too late, they are already involved.
POINTS OF CONTRACT YOU REALTOR WILL MAKE YOU AWARE OF:
- Whether the offer is all cash or if financed, the proposed type of financing
- Amount of down payment
- Waiver of standard buyer inspections or contingencies
- Seller costs, including possible proposal to pay the buyer’s closing costs
- Unusual requests or allowances
Some buyers may send photographs of themselves, often including their pets or their children. They may write letters to the seller, talking about why they want to buy the home and sharing a bit of personal information. Your Realtor should review all of these with you as well.
As the seller, once you’ve had a chance to digest this information, you can discuss your choices. You may decide to:
- Accept the offer the seller likes the best, or
- Issue a counter offer to one buyer or more than one buyer, or
- Ask all buyers to resubmit highest and best offers, or
- Adjust the sales price and look for more offers
Usually, the with your Realtor’s help you’ll be able to find an acceptable offer among the multiple offers. It is not always the highest offer but if it is financed, it is the offer the seller (your buyer) has a contingent property and believes it is sufficient to meet the buyer’s lender’s appraised value. If the home does not appraise, it generally doesn’t matter how much more the buyer offered. It needs to appraise because not every buyer is willing to bridge a deficient gap in an appraisal and pay a lot more than market value.
For all of the above, your best counselor is a great Realtor. It’s paramount to hire a Realtor that you like, trust, and respect even in a regular and balanced market if you don’t match well with your listing agent, your sale could be adversely affected.
Make sure you work with someone who understands the high pace and pressure a seller’s market can bring and who can negotiate adeptly for you.
Use the list above, do your homework and due diligence, and remember: These markets and others may be going gangbusters with activity, but selling your home is never a given. You and your Realtor will still need to hustle to land the right buyer.