In the real estate world, housing markets are described as being a “buyer’s market” or a “seller's market,” indicating more favorable conditions for one or the other. To sell your home quickly, you’ll want to understand your market and how to take advantage of prevailing conditions.
Tips for a Seller’s Market
In a seller’s market, there is a large number of potential buyers and few homes for sale, so competition can be fierce among bidders. These conditions favor sellers — they are likely to get multiple offers, over-asking-price offers, and have their home go under contract quickly.
Here’s how you can benefit as a home seller:
- Price your home competitively. If you’ve lived in your home a while, you know all its best features and perhaps you’ve made a lot of improvements. But a buyer looks at the home with fresh eyes and some improvements might actually be turnoffs. Your real estate agent can suggest a fair price based on recent sales data of nearby homes similar to yours. "A realistic price will attract more interested buyers, she says, and they may end up bidding against each other,” says Tara Powell, a broker with the NC Coastal Team and RE/MAX Ocean Properties in Emerald Isle, North Carolina. A realistic price tag can pay off by bringing in more offers and organically raising the price. This strategy will protect the seller against the risk of low-value appraisals, while capturing the highest dollar for the property.
- Disclose everything you should. This is not the time to try to hide any defects. You’ll want to list everything you know about the home in the disclosure forms. If you don’t, and a problem is detected during inspections, you’ll be on the hook to do repairs or the buyer could even back out. “That can really affect sellers who may be trying to buy with the money they anticipate having from the sale,” notes Svenja Howerton, an agent with Century 21 Liberty in Fayetteville, North Carolina. “You’ve now got a huge capital expense on something you weren’t expecting, and that can derail the whole process.”
- Weigh multiple offers carefully. If you receive multiple offers, don’t be blinded by the dollar signs and just go with the highest offer. “A lot of sellers make this decision too quickly,” says Powell. “Sometimes I ask that they just let the house show another weekend instead of going with the first offers they receive.” There are other factors to consider, such as: Is the buyer pre-approved? Does the offer include contingencies that could make the deal fall through? What happens if the bid comes in higher than your home’s appraised value, in which case you might need to lower your price or have the buyer increase their down payment to close? Are they willing to close quickly? You and your agent should discuss the implications of each offer and choose the one that offers the best set of terms for your specific situation.
- Anticipate your next move. As soon as your home is under contract, it’s likely that you’ll find yourself on the other side of the transaction as a buyer. You’ll want to have a sense of the competitiveness of the market that you’re moving into and know your next move if your house sells quickly. Some sellers may move in with friends and family while they buy their next home. If that won’t work for you, consider a rent-back agreement, which will allow you to rent the house temporarily from the buyer.
Tips for a Buyer's Market
In a buyer’s market, there will be more homes for sale than there are buyers, and sellers may have to work a little harder to land offers.
Here’s how you can benefit as a home seller:
- Boost curb appeal. Your home’s yard and exterior are the first things that potential buyers will see so you’ll want to be sure to clean up and tidy your yard, repaint or replace worn shutters and other fixtures, and maybe add some color with flowers in beds or pots.
- Stage your home. You’ll want buyers who come inside to get a feeling for how it would be to live in the home. In other words, you’ll want your home to be inviting. This starts with removing extraneous bulky items and all clutter. Then you’ll want to be sure rooms are engaging to the eye, perhaps with a splash of color or an interesting focal point (like a piece of furniture). You may want to create “nooks” where they can envision themselves relaxing after a hard workday. Or a poolside refreshment area. If you’re not the artsy type, you can hire a professional home stager who can work with you and your agent to enhance the space
- Prepare to make concessions. When the market favors buyers, they may feel emboldened to ask for home improvements or make an offer under the asking price. Knowing this, it’s a good idea to go into a sales discussion with a sense of the kinds of concessions you’re willing to make. Are you willing to negotiate on the asking price? Are you flexible on the closing date? Are you willing to pay for some repairs if requested? Are there contingencies that you’d like to have but would be willing to waive in a pinch? If you know what concessions you are (and aren’t) willing to make, you’ll be in a better position to negotiate with buyers.
We’re Here to Help
Whether you’re just thinking about buying, ready to start home-shopping in earnest, or thinking about refinancing, an AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of low-rate and low-cost mortgages designed to meet your needs.
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