What You Should Know About Selling Your Home In A Buyer’s Market
By Kevin Graham
When you look at the market data across the country at this point in 2019, you can see it’s a pretty darn good time to be selling your home. According to the National Association of REALTORS®, the average property only spent 27 days on the market in June. At the current sales pace, there were only 4.4 months’ worth of supply available on the market.
However, while national numbers can be fun to look at, all real estate is local. Every market is different and not everyone’s market is running so hot. We thought it would be a good idea to give you some sales tips on what to do if you find yourself in a buyer’s market. But before we get there, let’s go over something a little more basic.
How To Determine If You’re In A Buyer’s Market Or Seller’s Market
The most fundamental question you might face upon determining when to sell your home and how to price it is whether you’re in a buyer’s market or a seller’s market. These refer to times when market conditions favor the buyer or seller. How do you go about evaluating that? The key is to look at some data. We’re going to lay out three key metrics for you.
The first thing to be aware of is whether prices seem to be going up or down in your area. If they generally seem to be on the rise, it’s a good indication of a seller’s market. If they haven’t moved much or are going down, the buyer has the advantage.
The second thing you can look at is time on the market. If properties are selling soon after being placed on the market, that means sellers are likely getting higher prices because demand is high. Supposing that it’s taking a while for a property to sell, one reason for this might be that buyers just have more options and the market has swung in their direction.
Finally, by poking around various real estate sites, you can get a sense for how many existing homes are on the market in your area. If there seem to be a lot of listings (particularly for the type of property you’re looking to sell), it could indicate that the pendulum has swung in the favor of the buyer.
What’s The Best Time To Sell?
As a seller, the idea is to get as much money for your home as you can as quickly as possible. With that in mind, what’s the best time to sell?
Looking at the data alone, homes sell 6 days faster than usual and you get more money in the first two weeks of May. However, there’s more than that to take into consideration.
It’s also important to take a look at the ebbs and flows of your local economy. When jobs seem to be plentiful and wages are good, you might be able to get a higher price for your home. The same goes for mortgage rates. If they happen to be low at the moment and it’s cheaper to borrow money, you may be able to fetch a higher price for your home.
Finally, you’ll want to make sure your home is in tip-top shape and at its most attractive in order to fetch a higher price. Take your time and get it right. Even if you end up selling in the middle of winter, this could work out better for you. One, the people looking to buy in the winter are certainly motivated if they’re willing to visit open houses in chilly temperatures. You also may benefit from the fact that there are typically less homes for sale at this time of year, so choices are limited for buyers.
Why Would You Sell In A Buyer’s Market?
Since the goal is to get as much money as you can, why would you sell in a buyer’s market? There are a few good reasons you might consider doing so.
If you’re looking to upgrade or downsize your home, you may want to take advantage of the low prices offered by a buyer’s market. In most cases, even if it’s not the absolute best time to sell, selling is going to be more practical than dealing with two mortgage payments while you wait for the market to turn back around (particularly if you don’t have a desire to rent out the property).
Supposing that you inherit a property or otherwise come into possession of a home and don’t want to live there, you may decide to sell the property relatively quickly so you don’t have to deal with ongoing payments for property taxes and homeowners insurance.
When to sell definitely depends on your situation, but these are all things to think about.
Tips For Selling Your Home In A Buyer’s Market
Now that we’ve gone over how to find out if you’re in a buyer’s market and why you still might choose to sell, what’s the best way to get as much money as you can quickly? We’ve got a few tips.
Pick The Right Price
Whether you’re in a buyer’s market or seller’s market, one of the most important things you can do is pick the right price at which to list your home. Buyers are seeing a lot of houses during the search process both online and in person. If you list too high, buyers or their agent will sniff that out and you’ll have trouble garnering offers.
That said, the best thing to do when you’re getting ready to price your property is to look at comparables. These are properties which are similar to yours that have sold recently in your area. If you have a three-bedroom ranch, you want to make sure you’re comparing to other three-bedroom ranches, for example.
You can get a sense for prices in your area by looking at various real estate sites. You may find FSBO’s Pricing Scout Tool to be really helpful in getting a baseline estimate of their pricing at this point in time.
One thing you can do to make yourself stand out in a buyer’s market is to have your house be in the best possible shape of its life.
When people buy homes, it’s strongly recommended that they get a home inspection done before closing. However, there’s nothing saying you can’t do this yourself as a seller before you put your home on the market in order to try to fix as many of issues as you can lest you scare off a potential buyer. That way there are no surprises and you’ll be less likely to have an issue that’s a deal breaker for someone.
Proper Staging And Curb Appeal
There’s a certain psychology to home buying; you want to showcase your home in the best light possible. Plant flowers, put extra care into the lawn, bake cookies. Maybe buy a decent speaker and have some light music playing as they walk through. If it’s winter, have a fire going in the fireplace. Have enough furniture so it looks like someone lives there, but not so much as to clutter rooms and make things look crowded. Make sure everything is clean and tidy. You really want to do whatever you can to make this a place someone can imagine themselves living in within the short amount of time you have them over for an open house.
List In The Right Places With Good Photographs
More and more people are using real estate sites to preselect places they might want to see at an open house or a showing before ever talking to an agent or thinking about hitting the street. With that in mind, it’s important to make sure you’re on all the sites (including FSBO) where your buyers might be looking.
Once they get to your home’s online listing, you’re going to want everything shown in the most flattering way possible. Make sure to take great photographs of the home’s various features with good lighting and the right angles.
With a transaction as big as a home sale, it could very well be worth hiring a professional photographer to come shoot for a couple hours and do some photo editing for you.
Show Your Home Whenever You Can
One really important thing to keep in mind is that buyers are often just as motivated to see your house as you are to sell it. They may want to see your home on short notice. If you’re looking to get foot traffic through your home, it’s in your best interest to be as accommodating as possible even if it means making the home available for showings on nights and weekends. Often, buyers are trying to see homes around their work schedule and these are the most convenient times.
It can be a bit of a pain, I know. However, the more people that go through your home, the more likely you are to get an offer quickly.
Be Flexible On Closing Costs
It’s difficult to tell someone to adopt a strategy that potentially eats into their profit margin. But if you’re having trouble getting people through the door or people are saying they might put an offer in if the listing was a little cheaper, one thing you can try is offer to help with closing costs.
Depending on the type of loan someone is applying for, sellers are allowed to contribute a varying percentage of the overall loan amount toward the buyer’s closing costs. As a seller, you might do this to incentivize the sale.
You and the buyer could also negotiate so they’ll give you the higher asking price you’re looking for if you agree to help them with certain closing costs. This way you get the higher price you want, and the buyer is able to effectively finance their closing costs into the loan so it doesn’t all have to be paid up front.
Change The Move-In Date
One other thing you may be able to do is to give some leeway on the move-in date. This can be attractive to certain buyers.
As an example, let’s take a family with school-age children. If they’re buying in the spring, they may want to wait until the end of the school year before they move. If they’re buying later in the summer, they may want to move in quickly so things are settled before school starts. Showing some adaptability in this area can really help you close the deal.
Providing that you want to sell your home in a buyer’s market (or even in a seller’s market), these tips should help. If you’re ready to sell your property, go ahead and get started today!