January 6, 2021
If you’re fortunate enough to be selling your home in a seller’s market, you have reason to feel pretty confident. After all, sellers’ markets are some of the best environments to put homes up for sale. They offer increased opportunities for multiple bids, offers over asking price, and quick turnarounds. With that being said, it’s still essential to put your best foot forward by optimizing your strategy to stay competitive with other homes hitting the market.
What is a seller’s market?
In layman’s terms, a seller’s market in real estate occurs when there are more home buyers than there are properties available on the market. These conditions are favorable for sellers. Typically, in a seller’s market, homes spend fewer days on the market, and selling prices are generally higher on average thanks to competing buyers.
How do I sell my home in a seller’s market?
- Set the price strategically. Before you set the asking price on your home, you should research your home’s estimated value and look into the asking prices of other, similar homes in your market. Be sure to check out recent closing prices of homes in your neighborhood too. Once you know your home’s value, it’s time to implement a strategy.
If you’re looking to sell your home quickly, you can set the price at either market value or even just below market value. Doing so may encourage multiple offers and up the chances of a bidding war on your home. If you’re in no rush to sell, maybe price your home slightly above market value and be prepared to experiment with different asking prices. For example, if you set the price at 10% above market value and don’t get any bids, consider reducing it to 8%. Adjust your asking price as necessary as you start to learn more about buyers’ spending patterns in your area.
- Spend time staging your home and creating a first-class listing. Unfortunately, a buyer’s market doesn’t guarantee the sale of your home. Instead, it’s crucial in any market — a buyer’s or a seller’s — to create an inviting experience for buyers, both online and in person. Consider hiring a professional photographer to photograph your home for your listing. Also, maybe work with a real estate agent who can provide ideas for staging your home. Aside from creating a better experience for buyers, creating a compelling listing in a seller’s market increases the chances of multiple buyers making offers on your home. Remember, having multiple in-hand offers will give you the leverage you need to negotiate the best deal.
- Get your paperwork in order and be ready to move out quickly. In a seller’s market, buyers can be particularly motivated to close — and close quickly. With this in mind, you will want to make sure you have all your paperwork in order before putting your home up for sale. This includes items like a completed home inspection and your disclosure papers. It’s also a good idea to have the majority of your possessions packed or in a storage unit and to have somewhere to stay if you’re still waiting to close on another home. You may be able to negotiate a later move-in date with the buyer. However, it is best not to limit yourself. Instead, make plans to stay with a friend or have a rental lined up where you can stay for a few weeks.
- Be available, but not too available. Use the concept of scarcity to your advantage. For example, limit your home to just a few targeted showings and avoid over marketing your home by doing something like posting a flyer at your local coffee shop. Limiting your exposure can play to human psychology. The idea is to give the impression that you’re not desperate to sell. Creating exclusivity may increase the value of your home in the buyer’s mind. This is one strategy that can be very successful in a hot market. However, keep in mind this strategy is completely dependent on whether your home is getting traction in online marketing or early showings. If you haven’t gotten nibbles from potential buyers, limiting showings is more likely to be inconvenient than alluring to potential buyers.
- Stay objective. It’s not uncommon in sellers’ markets for buyers to include personal notes with their offers, with information about their family and needs or simply stating how excited they are about your home. These notes are meant to humanize the buyer and distinguish their offers from the rest. As lovely as it may be to receive these notes, from a financial standpoint, it’s better to focus on the financial details of an offer when choosing a buyer. There may be an emotional component to selling a home. However, considering the size of this transaction and your investment; it’s much more important that the deal makes financial sense. You want a good price and a buyer who can bring you to the closing table without too much hassle.
- Be realistic. It’s easy to get excited at the thought of selling your home above the asking price but holding out for the perfect offer can prevent you from accepting a fair offer that’s right in front of you. Instead, spend some time thinking about the minimum offer you’d be willing to take and be ready to move forward with the sale when it finally comes along.
To learn more about PenFed loans or determine which loan is right for you:the Mortgage Center