So you’re ready to sell your house but have no idea how to tackle the current market? With constant shifts in the market, it’s essential to understand the type of market you’re in before selling a house. The kind of market you’re currently in plays a crucial role in figuring out whether it’s actually an excellent time to sell your home or if you should potentially hold off. Also, combating the market as a seller is different in a buyer’s market versus a seller’s market, so determining that is the first step to figuring out the rest.
What markets are there, and what does that mean for those selling a house? Let The Hogan Group give you a crash course in both and help you learn how to tackle the market best.
What is a buyer’s market?
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A buyer’s market typically occurs when the supply exceeds the demand. Plenty of houses are available for sale, but there simply aren’t many people needing homes. Conditions like this give buyers leverage because they know the seller will be more likely to negotiate at a lower price.
In this market, prices decrease quickly, and houses tend to sit on the market longer than average. This situation will cause sellers to compete with one another to attract potential buyers, drop their listing prices, and make more repairs to make their homes more desirable. This market is an excellent time to purchase a home, but it can be tricky to sell.
If you are selling a home in a buyer’s market, there are ways to make your house stand out from the rest. Make minor repairs, clean and declutter, price it competitively from the start, and market it well.
What is a seller’s market?
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A seller’s market is the opposite, when the demand is far greater than the supply. In this instance, fewer homes are available on the market, but the number of interested buyers is increasing. It’s easy to tell if you’re in a seller’s market based on several statistics. Properties sell quickly and are consistently above the asking price, and bidding wars break out. Often in this market, buyers will not want to compete and will be more willing to pay the asking price, accepting a home with little to no repairs. This market is a great time to sell a home as it gives you an advantage.
Many things can contribute to a seller’s market, like lower mortgage interest rates and growth in the local economy.
The current trends in Richmond luxury real estate, show that the housing market is a seller’s market, with active listings being down from previous months and the median home price increasing. The current median list price is in the mid $300k range, a drastic increase in the past six months. Additionally, the Market Action Index is sitting at 81, which is a vital indicator of a seller’s market.
What can you do as a seller in a seller’s market?
Now that you’ve established the type of market you’re in, it’s essential to understand what you can do to make things go smoothly as a seller. Although it may seem like a seller’s market is an automatic leg up, you’ll still want to consider a few things before listing a home and while you consider offers.
List your home at a fair price. The demand for homes is high, and the odds are good that you can get above the asking price. If you start at or slightly below the value, you’re more likely to generate higher interest, resulting in bidding wars and multiple offers above the asking price. It’s also important to remember that you don’t have to accept an offer and will likely have various to consider. That said, remember that pricing reasonably will always be your best choice.
Ensure that your home is “ready.” Make strategic updates to the house, clean and declutter your spaces, organize things, and ensure your curb appeal is on point. Just because you can expect a lot of interest doesn’t mean you shouldn’t ensure the house is ready for buyers. Many sellers expect such high interest that they fail to make basic changes to make their home stand out above the rest.
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Review offers carefully, and vet your buyers. Although the highest offer might seem the best, it isn’t always the case. What happens if a buyer offers you a great price but can’t secure the financing? Or the house doesn’t appraise, and they don’t have the funds to cover the extra? It’s essential to consider every aspect of an offer and the potential buyer before accepting anything. Consider things like cash offers, an excellent choice even if it’s not the highest because there is no lender, which speeds up the transaction considerably.
Act quickly. When you’re getting multiple offers, you certainly want to take the time to consider every aspect of them, but don’t delay too much. Buyers in a seller’s market will often bid on multiple properties; if you take too long, they may have already moved on. In short, be respectful of buyers and consider that they are in a tricky situation.
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The takeaway
Whether you’re selling in a buyer’s or seller’s market, there are plenty of things you can do to make the process go more smoothly. Simple fixes around the house, excellent negotiation skills, strategic pricing, and marketing go a long way in any market. Hopefully, you’ve found these tips helpful and find yourself in a position to take advantage of the wonderful market that we currently have. If you find yourself ready to put your Richmond luxury home up for sale and are looking for an exceptional agency to work with, contact me, Mike Hogan, and let’s get you situated.
*Header photo courtesy of Shutterstock
