You may have heard that real estate is a seller’s market right now, but just what does that mean? Knowing the difference between a buyer’s market and a seller’s market can help you sell your home faster, and for a higher price. Read on for an explanation of each market type and the best strategies for buyers and sellers in each.
A buyer’s market exists when there are more homes for sale than there are potential buyers, or supply exceeds demand. This increases competition between sellers as they all try to make their homes the most appealing. Real estate prices will decrease during a buyer’s market and homes may sit on the market for long periods of time. Sellers will be more willing to negotiate and make other concessions, such as repairing damage found in an inspection or including upgraded appliances.
- Offer below asking price
Since sellers are more willing to negotiate in a buyer’s market, buyers can start their offers well under the asking price to give plenty of room to move up while still getting a great deal.
- Go for the extras
Asking for extras such as included appliances or furniture, upgraded electric and plumbing fixtures, or a new roof is common during a buyer’s market, so be assertive about exactly what you want in a new home.
- Clean and make repairs
Buyers will not be impressed with a dusty house full of weekend projects. Replace the missing crown molding, glue that drawer front back on, and give the entire house a good once-over with soap and water.
- Highlight unique features
Visit nearby available properties that are similar in value to your own home. Figure out what sets your property apart from these homes and play up this feature in all home marketing. It could be something as simple as a screened-in porch or solid wood front door, but focus on how your home is unique so it doesn’t just fade into the background.
- Set your price with concessions in mind
Concessions are inevitable in a buyer’s market, so keep this in mind when setting your asking price. If you know potential buyers will likely want new carpets or fresh paint, set your price slightly higher to give you room to come down and make the buyer feel like they’re getting a better deal.
A seller’s market exists when there are more buyers than there are available homes, or demand exceeds supply. We are currently experiencing a seller’s market due to a home inventory shortage caused by rising construction costs for new homes. Buyers carry the burden of making their offer stand out among many others in a seller’s market.
- Be ready to act
There’s no time to dawdle during a seller’s market. Properties may sell within just hours of hitting the market, so buyers need to be ready to make an offer before they ever set foot on the property.
- Offer cash
Buyers who require a mortgage, including the appraisals and other contingencies that go along with it, are at a great disadvantage during a seller’s market. A cash offer with no contingencies has the best chance of being accepted.
- Be patient
It’s important to be ready to act, but don’t let that push you to put in an offer on a home you don’t really want. Patience is key in a seller’s market to avoid that fear of missing out.
- Compare offers side by side
Gather all offer details together in whatever format you prefer, such as a spreadsheet. This allows you to compare apples to apples and choose the best offer (which isn’t always the highest price). Pay special attention to any contingencies and concessions the buyer is requesting.
- Ask for a pre-approval letter with all mortgage offers
For buyers submitting mortgage offers, ask for a pre-approval letter from a credible lender to be submitted with the offer. This will stop you from wasting time with unqualified buyers.
Whether you’re buying or selling, knowing the current real estate market trends is critical to getting the most bang for your buck. Our real estate team at Douglas Realty Property Management can help you navigate both buyer and seller’s markets, getting you a fair deal in a reasonable amount of time. Call us at (239) 542-6906 or visit douglasrealty.net for the best real estate and property management services in southwest Florida.