Tips for Home Buyers and Sellers in a Buyers’ Market
When there are a lot of homes for sale in a particular market, buyers and sellers must both adapt their strategies. Here are tips for home buyers and sellers in a buyer’s market.
Sellers: Put your best foot forward
In a buyers’ market, a home’s true value may not be in line with the seller’s hopes or expectations. If you need to sell in a buyers’ market, you must put your best foot forward from the beginning.
Also, only the most serious sellers should list their homes for sale in a down market. If you don’t need to move, but simply want to, then you’re not a motivated seller. And if you’re not motivated, you probably won’t price your home in line with recent comparable sales. Your home, then, will probably sit on the market for a long time, creating a big stain on your home and your listing. When it does come time to get serious, buyers will discount you.
Sellers: Wait until you’re truly motivated
For sellers, the better option is to stay in your home as long as possible. Wait until you’re really ready and motivated to sell it. At that point, it’s important to price the home correctly from the start. Also, make the necessary cosmetic improvements: clean, clear and declutter to get the home in its best possible condition.
By following this path, your home has a better chance of selling in a timely manner. And you’ll ultimately net more by having held out, vs. if you listed the home and had a series of price reductions over a one-year period.
Buyers: Know the risks
Being a buyer in a buyers’ market is what you want. You have the pick of the litter, lots of options and time on your side.
But it does come with risks. A buyer’s market, in which there are more homes for sale than there are buyers, happens for a reason. Maybe the economy is depressed. Credit is hard to get. Or your local market is slow (and could get worse). Try to understand why it’s a buyers’ market and see how you can leverage that.
Buyers: Do your research
When you get into the market, do your research. Understand pricing across the different towns, neighborhoods, and school districts. Buying in a buyers’ market just might afford you the opportunity to get into the best area. Once you’re in, you’re in. It may not be possible to get into the best area six months or a year later.
After identifying the location (or locations) you prefer, hit the ground running. Check out the current inventory. Know upfront that not all sellers are created equal. Some simply list their homes for sale but aren’t serious sellers. Don’t waste your time on them. If you find a seller who’s just not that into your offer, make your best and final offer and move on.
Buyers: Identify the motivated sellers
If value is more important to you than the home’s floor plan, location or lot size, identify the most motivated seller. Often this is the person whose listing has been sitting around for months and months. Work with your agent. Find out why the seller is selling.
When you find a motivated seller, make a low offer but make it clean. Complete your inspections quickly, get fully approved for a loan, and make the timeframes fast. A foolproof offer, even if low, will motivate a seller to bite the bullet and move on.
Buyers: Look for the ‘value add’
Markets will turn around eventually. Buying in a slow market all but ensures you some equity when the market improves. But take it one step further. Identify a home in a down market that needs some work, and you’ll have an additional layer of value-add or equity. While you don’t need to find a total fixer-upper, be open to a kitchen or bathroom remodel. These renovations will add value. And you can make the home yours, instead of buying someone else’s choices.