Spring and summer are certainly busier than fall and winter in the real estate world, but the fluctuations within the market actually have a lot more to do with supply and demand than they do with the time of year. This is why we have the terms “buyer’s market” and “seller’s market”. Right now, we are in a seller’s market, but what does that mean for you? Let’s look at the basics, and we’ll share some tips for both buyers and sellers.
What is a seller’s market?
A seller’s market happens when demand exceeds supply. Basically, this means there are lots of interested buyers, but not as many homes to choose from. Since there are fewer homes available, sellers are at an advantage, and buyers have to be ready for quick action.
What effects does a seller’s market have?
In a seller’s market, homes sell faster, and buyers have to compete with each other to get a property. These conditions often make buyers willing to spend more on a home than they would otherwise. Therefore, sellers can reasonably raise their asking prices. Also, increased interest means that buyers have less negotiating power and are more likely to accept properties as-is.
With a shortage of housing, a seller’s market can often lead to bidding wars. During bidding wars, buyers make competing offers, driving up the price–often above the asking price. Great for sellers! Not so great for buyers.
Tips for buyers during a seller’s market
Choose an experienced real estate agent.
You will need the knowledge, advice, and quick action of someone who literally does this for a living. (Hot tip: That’s us!)
Speed is the name of the game. For hot markets, you might have very little time to get your offer submitted after you view the home. So get everything done and ready ahead of time so that you know exactly how much you can spend and can act fast.
Shorten your list of demands.
Sellers might see contingencies as obstacles. If they’ve got lots of offers to look through, they’re more likely to choose an offer that’s simpler and easier, with less likelihood of falling through. In a competitive market, other buyers might remove or reduce their contingencies to make their offer more competitive.
A leisurely approach to home buying isn’t going to work in a seller’s market. Keep a close watch on new listings, and set up viewings as quickly as possible. Be ready to act fast so you can beat other shoppers, because homes won’t remain on the market for long, especially if they’re in popular areas.
If you want to be in the game, your bid may have to be close to if not higher than the asking price. Your real estate agent should help you develop the best pricing strategy for your situation.
Tips for sellers during a seller’s market
If you are lucky enough to be experiencing a seller’s market in your area, congratulations! It is a fantastic time to sell. Your days on the market will likely be fewer, you’ll hopefully receive multiple offers, and this could drive up the sales price. Unique or difficult to sell homes will generally fare better in a seller’s market too.
However, while it might be easier to sell in a seller’s market, it still takes a lot more to sell a home than putting a sign out front. These strategies can help your process be as smooth as possible.
Cleaning and staging are still important.
Buyers may be more willing to overlook some flaws in a seller’s market without as many homes to choose from. Beggars can’t be choosers. But as a seller, you still need to clean your house from top to bottom and stage it well.
List on Thursday/Friday.
Friday is a hot day for home selling. If you set your listing to go live on Thursday night, buyers will find them right away on Friday morning, giving you a bit of an edge.
Professional photos, great lighting, and a virtual tour
It’s always in your best interest to make your house look its best. Don’t cut corners here, even though it’s tempting to take the easy route. When your house looks its best, you’ll get the best price for it.
You make the rules.
Since you’ve got the advantage, you don’t have to allow tours of your home at all hours of the day. It’s ok to specify the hours and days when viewings are available. Not only does this make life easier for you, it will also increase the chances of multiple buyers being present at the same time, which can spark a competition and get those offers rolling in.
Regardless of the market conditions in your area, hiring a real estate agent is still the best way to navigate the housing market. We have the expertise and skills necessary to give you your best shot at success.