Sellers’ Housing Market

Mike Capelle, Broker/OwnerMike Capelle, Broker/Owner

Demand for real estate is growing strong in many parts of the country, and entry-level buyers find little inventory but lots of competition, leading to a frustrating sellers’ housing market.

For sellers, this means quicker and easier sales, if they price appropriately. For buyers, this means fighting it out with others for their dream home. Here are tips for both sellers and buyers in competitive markets.

Seller: Prepare, inspect, disclose and plan ahead

Although sellers hold the cards and can call the shots in periods of high demand, the market is less forgiving if you make a mistake. Losing a buyer and going “back on market” can mean that you will never see the great deal you had with the first buyer.

The trick is not to lose the first buyer. If you know you have issues, get in front of them. It’s better for you be up front about an issue rather than have your buyer discover it on their own, because once you have a deal, the buyer takes control. If the roof is old, you have a room that’s not permitted, or you have a small plumbing issue, it’s better for you to tell the buyer in advance, so they can factor that into their offer. It is even better to deal with small issues, or even to have inspections done, before selling, so that the negatives don’t cloud the positives. Buyers are more forgiving of defects if they are competing with other buyers, but discovery of issues after a deal is reached could kill the sale.

Buyer: Be ready to move

Successful buyers in a sellers’ market are aggressive, motivated and quick to act. You must compete with these folks if you are serious about becoming a homeowner in a competitive sellers’ housing market.

Before you even start looking, you must have your financing lined up. In a competitive market, sellers will not take their home off the market without proof that you have the ability to pay. If you intend to finance the purchase with a loan, you need at a minimum a loan pre-qualification letter—better yet, a pre-approval letter. If paying cash, you need a bank/brokerage statement showing you have the funds to purchase.

The second a desirable new listing alert hits your phone or email, make a point to see it. If a home goes on the market Tuesday, you can’t expect it will still be available that weekend. The competitive market and a strong desire for homeownership will propel a serious buyer to get into a house and make an offer within days of it listing. There is nothing more disappointing than to hear that a great home is no longer available.

Seller: Have a strategy for dealing with offers

It might seem obvious to take the offer you get two days after going on the market, but are you moving too fast? Will there be others if you wait? There’s no universal approach because each town, county and a market are different. In some, it will make more sense to wait a week to 10 days, have more showings and review any and all offers at once. In others, you might want to act on the offers as they come.

If you take the wrong approach, you might miss out on a better offer to come, or lose the excitement and momentum of a motivated buyer. You and your agent should discuss strategy before listing, and your agent should keep you up to date on what is happening with your listing over time. The real estate market changes from month to month, and you may need to make changes in your game plan, in consultation with your agent.

Buyer: Expect to miss out a few times

Buyers may they need to miss out on a few houses to truly appreciate the right house when it comes along. The buying process takes buyers in many directions, and the market is always changing with new listings and sales. Go with it…don’t get too attached to that one house, be ready to compromise on your requirements. You might not offer enough or not act fast enough on one or two homes early on. The more homes you see, the more comfortable you will be with the market and how it works.

Learn from each missed opportunity. Knowing that you lost out once before will motivate you to make the best offer the next time. You don’t know what you don’t know, so be willing to chalk up a loss or two to experience. Plus when you look back, you may realize that a home you thought was perfect wouldn’t have been so great after all.

Seller: Know the competition — and compete

A smart seller will consider what else is currently on the market along with recently completed sales. Once they are ready to go, they will analyze with their agent the “comps” again. The strategic seller will price their home to get the eyeballs and showing activity.

Chances are you can’t compete with the similar home down the block with the killer kitchen. But price your home with that fact in consideration, and a buyer may see value along with room for improvement in your kitchen.

The well-priced homes that show well will grab the immediate attention of the buyers, and sell faster and for more money.

Be prepared, whether buying or selling

Real estate is expensive, and the process can be stressful. In active markets, both sellers and buyers need to be on their game if they want to successfully buy and sell.

Sellers have the advantage because they can plan in advance of going on the market. They have the luxury of being proactive, and they should use that to their advantage.

Buyers need to be reactive and, as such, they need to be prepared to move quickly. When all is said and done, life goes back to normal. But prepare for a little disorder in the meantime.

— Inspiration: Zillow Blog

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