Selling a home in a buyer’s market and selling a home in a seller’s market are not the same. Home sellers experiencing a seller’s market are likely to receive multiple offers and have fewer days on the market. They will also benefit significantly from increased sales prices. So, is it smart to sell your house in a seller’s market?
The short answer has to be yes. But there are many factors to consider. Is there a valid reason to sell your house at the moment? Are there other strategies that may work better for you? Will you be able to afford a new home after selling yours if you are staying within the same market? Once you have that all sorted out, it’s time to look at how to benefit from a seller’s market.
Drivers Of High Demand
Demand is what drives competition, so you should take advantage of increasing demand whenever you have the opportunity. More people looking to buy a home will increase the chances of making more money in a seller’s market. Some homes, specifically those you would refer to as unique and are hard to sell in any real estate market, usually have a higher chance of selling in a seller’s market.
In addition, some seller’s markets may experience a limited number of homes for sale. If the choices are few most of the attention will go to the nicer homes. Since the options are few and far between, even the ugly homes will sell in a seller’s market.
Low interest rates on mortgages are another reason for high demand. For instance, during the height of the COVID-19 pandemic last year, the market experienced drops in interest rates to all-time lows.
How To Attract Multiple Offers In A Seller’s Market
There’s more to garnering multiple offers in a seller’s market than sticking a sign in the yard. While it’s not as difficult to sell in a seller’s market, you will have to do a lot more than hanging a sign in the front yard to sell a home. You will have to create a strategy and learn “what is a seller’s market” before you put up your home for sale.
1. Prepare The Home For Sale
Your strategy to sell your home may or may not include home staging. However, you will have to ensure the house is thoroughly cleaned. Buyers in a seller’s market tend to ignore minor defects because there are minimal choices presented to them. However, you don’t want to ignore the basics things to prepare your home to be sold.
Even though carpeting is not a barrier that’ll prevent an interested buyer in a seller’s market, try to replace it if it’s worn as it’ll give you better chances of selling your home faster. Optimize a hardwood look in other areas of the house other than the bedroom areas – put carpeting in there.
2. Put Your House On The Market On Friday
The best day of the week for home sellers is Friday. Whether you are working with a realtor or doing it on your own, an effective strategy for the seller’s market is to ensure you “go live” at midnight on Thursday so that when buyers get up on Friday morning, yours is among the new listings they see.
Make the online presentation pop out by color-correcting your photos to perfection. Release digital ads to Facebook or other websites and upload virtual tours of the home if you can.
3. Limit Showings
The more people think they can’t have your house, the more they’ll want it. Don’t allow people to view your home at all hours during the day. Set time restrictions for different hours. This will spark a competitive nature among buyers when they view the home when other buyers are present.
4. Lower The Sales Price
Set the price of your home a little under its market value. This will ensure you attract more buyers. It will also allow buyers to begin bidding over the asking price. Even though it isn’t a necessary strategy, it works well in some markets.
5. Resist The Urge To Set A Time For Offer Presentation
You run the risk of losing out on buyers if you alert them that you’ll be reviewing offers on a specific time or day. Buyers don’t like the anxiety of finding out whether or not you’ll accept their offer.
Many buyers will also let you know they’re not interested in multiple offers. By the time they find out whether or not you’ve accepted their offer, their attention will be somewhere else.
Makes notes about each offer so you can compare them easily once you’ve received them. Other than the price, look at other factors such as:
- The earnest money deposit from each buyer
- The proposed type of financing and whether the offer is financed or in cash
- The amount of down payment
- Waiver of buyer contingencies and inspections
- Unusual allowances and requests
- Costs of the seller inclusive of the possibility of paying the buyer’s closing costs.
As the seller, be wary of buyers trying to play to your emotions. They may try to send you photographs of themselves or their whole family, including their kids and pets.
Some may write you a letter telling you why they’d like to be the new owners of your home and share personal information. Read through the letters and find out whether they’re picked from the internet or they’re real.
Once you’ve had time to review and digest all the information above, you have to make a choice.
- You can accept the offer that’s most attractive to you
- Issue counteroffers to one or more buyers
- Send a request to your buyers to resubmit their best and highest offers
- Adjust your sales price and be open to more offers
In most cases, buyers and sellers can always come to a fair agreement. The offer the seller accepts isn’t always the highest one. However, if the offer is financed, it’s the one the seller is convinced is enough to meet the appraised value of the buyer’s lender.
It usually doesn’t matter how much more the buyer offered if the home doesn’t appraise at the price offered. Financing will not cover the extra cost, and not all buyers are willing to make up for the shortfall in the appraisal and consequently pay more than the home’s market value.