When looking to buy or sell your home, it's important to remember that real estate markets are fluid. They're always moving and changing. While it might have been a buyer's market two months ago, supply and demand could have easily transformed it into one that is ideal for those looking to sell. But what exactly is a seller's market, and what does that mean for you when looking to sell your home?
In simple terms, a seller's market is when the demand for homes exceeds the number of those available. When this happens, a seller can expect multiple buyers interested in their property and more room for negotiation. Homes in a seller's market also tend to sell quickly and at asking price (or higher).
What does a seller's market look like?
- Low "days on market": Days on market is the average number of days a listing is active in your search area. If this number is low, it means that homes are quickly selling.
- Higher offer prices: Because there's higher demand (as compared to a buyer's market), sellers have the ability to raise their asking prices or participate in a bidding war among buyers. This bidding war will raise the overall price as both parties attempt to "win" the home. If you're seeing homes sell well above their listing price, it's a good indication you're in a seller's market.
- Rising home prices: Similar to higher offer prices, the listing price for homes being sold will usually start to trend upwards due to the overall demand for housing. If multiple homes in your neighborhood are raising their listing price, it's a good sign you're in a seller's market.
Tips on buying in a seller's market:
- Be prepared: Things move quickly in a seller's market. Before starting your home search, you should obtain a pre-approval letter from your bank. This helps show the seller that you're serious about purchasing their home by already being qualified for a loan.
- Watch your contingencies: Contingencies are certain conditions that must be met for a deal to go through. While some are understandable and normal (for example, having a positive home inspection) others could paint you as a risk to the seller (wanting to sell your home before fully purchasing).
- Offer a higher earnest money deposit: An earnest money deposit is a deposit you make in good faith that tells the seller you're going to purchase the home. Presenting a higher earnest money deposit is a good way of letting the seller know that you're serious when it comes to your offer.
Deciding on the best time to sell your home can be confusing. Let the talented team of Jessica & Sarah use their years of experience to not only help you quickly and conveniently sell your current home, but also help you find and buy your dream home.