Sellers' Market: What to Know
A seller's market is a real estate market in which the seller has an advantage over the buyers. This usually happens when there is more housing demand than houses available. Home buyers need to know what a seller's market means and how they can take advantage of it. On the other hand, sellers need to understand the pros and cons of selling in a seller's market so they can make the best decision. Here are a few points for buyers and sellers in a seller's market and how they can navigate it.
What does a seller's market mean for buyers and sellers?
In a seller's market, homes sell quickly and for higher prices than in a buyer's market. This is due to limited inventory and high demand from potential buyers. While this may seem like an ideal situation for sellers, there are also some disadvantages. One downside is that sellers may be less willing to negotiate on price or terms since other potential buyers are interested in the same property. On the seller's side, there are also several drawbacks; sellers may find themselves in multiple-offer situations, which can be stressful and time-consuming. However, despite these potential drawbacks, a seller's market offers several benefits:
- Sellers are more likely to receive their asking price or even above-asking offers.
- They have more negotiating power when it comes to terms and repairs.
- Homes tend to sell more quickly in a seller's market, which can benefit sellers looking to move on quickly.making the transactions fast.
- On the buyer's side, sellers will mostly have properties ready for occupation, making the transactions fast.
Advantages of a seller's market
1. It is generally easier for sellers to sell their property
In a sellers' market, sellers can sell their homes much easier than a buyers market. This is because fewer homes are on the market compared to the number of buyers looking to buy. With so many buyers out there looking for a place to call home, your house will have a huge market base to choose from. This means offers coming in and the deal closing quicker than you could have anticipated.
2. Sellers can sell at higher prices
Owing to the forces of demand and supply, in a sellers' market, the prices of homes will be slightly higher than usual. Demand and supply forces generally posit that when the demand is high, the supply will be low, which could increase prices. On the other hand, when the demand is low, the supply will be high. This leads to a decrease in prices. In a seller's market, the demand is usually higher than the supply. This is because more people are bidding for the same property. This competitive bidding and buying pressure forces the prices up. As such, a seller in this market condition can sell their home for more.
3. Properties are usually ready for occupation
Sellers usually carry out certain activities to prepare the property for occupation in anticipation of selling. They do this so as to ensure that their property is desirable and attractive to potential buyers. As a result, many of the houses in a seller's market will be ready for occupation.
Disadvantages of a seller's market
1. Sellers may be indecisive due to many offers
When more offers come in, the seller may experience some decision paralysis. A seller might be overwhelmed by the many offers and can be indecisive as to which offer they should accept. As a result, they will waste valuable time trying to decide when they could have already closed the deal on another property.
2. Buyers may be impatient
In this market condition, many buyers out there are looking to purchase a home, and there will be competition. The buyer's level of impatience and enthusiasm can be high as they may want to seal the deal quickly. They may not be willing to wait and see how long a seller will take to decide. As such, they might give an offer on another house while waiting for the seller of the first property to make up their minds. There is always a danger of losing potential buyers in this market condition.
3. Sellers may be reluctant to sell while waiting for better offers
Because of the competition in the market and the fact that there are many buyers, sellers might think that they can wait for more attractive offers. However, delaying the sale might lead to a drop in prices, and hence, they might not be able to sell their property.
How to navigate the seller's market
To take full advantage of the seller's market, there are several strategies that you should employ.
As a seller
Make sure your house is presentable: This means doing general house maintenance, such as cleaning and moving furniture around. Also, make sure the garden is well kept.
Avoid giving deadlines for considering offers: This will give you more time to consider the various offers.
Be realistic about the price: In the current market condition, you will sell your house at a higher price than usual. You must decide whether you should sell the house at its prevailing valuation or wait for better buyer offers.
As a buyer
Get mortgage pre-approval: This way, you will have evidence and proof that you can follow through with your offer if the deal moves forward. You can connect with Mortgage Quote for a pre-approval.
Be prepared for competing buyers: In a seller's market, other buyers will be willing to pay more. You must remain firm with your bid while still being flexible enough to make adjustments based on the seller's terms.
Have a contingency plan: Even if you get an offer accepted, the deal might not seal. You should have a backup plan in case the deal falls through.
Rules for homebuyers in a seller's market
Things buyers need to know when it's a sellers market