Tips for Buyers and Sellers in a Sellers’ Market
Limited inventory of homes for sale? Lots of willing and able buyers? You’re in a sellers’ market, where such phrases as “bidding war” and “non-contingent offer” are music to sellers’ ears. It’s enough to scare a buyer away, but shouldn’t. Here are tips for buyers and sellers in a sellers’ market.
Sellers: You still need to make an effort
In a sellers’ market, well-priced homes in their best condition will sell instantly. Even so, as a seller, you should still put your best foot forward to get top dollar and complete a timely sale.
If your home is priced higher than comparable sales, or you don’t make a solid effort to make the house show well, your home may not get top dollar. What makes a sellers’ market so strong is attracting multiple buyers at once.
Sellers: Be prepared to deal with multiple offers
If your home attracts multiple buyers, try to choose the best buyer right out of the gate. Look for someone who’s highly experienced in the market, is working with a good local agent, has a loan lined up, and makes the most aggressive offer soon after you list. Often, your best buyer is the first to make an offer.
Also, when you accept the first offer, have a backup offer (or two) lined up and in writing. You don’t want to go back on the market. It signals there could be something wrong with your home. And once you’ve lost that initial momentum, it’s hard to get it back.
Buyers: Plan and strategize to win
Being a buyer in a sellers’ market is extremely frustrating. A buyer who has financing lined up and who has done their research still may be unable to get an offer accepted. There’s not much you can do but wait for more inventory.
Buyers: Act quickly and make a strong offer
Be the early bird. Once a good listing hits the market, see it ASAP. If it comes on the market on a Wednesday, don’t wait for the open house. Try to see it Thursday morning and if you love it, make an offer within hours. Come Sunday, the game may be over.
Make your offer a strong one not just in price but also in terms. Knowing that you may face other buyers, find out what’s important to the seller. Maybe they want a quick close or need time to find a home. Make your offer meet their needs as well as yours.
When submitting an offer, make your contingencies and timeframes swift and take as much risk as possible off the table for the seller. If you need to inspect the property and have an appraisal, get those done within days of getting into contract, not weeks. If you’re aggressive, have the home inspected prior to submitting the offer. Inspections pose the biggest uncertainty for the seller. If you inspect before making an offer, you can make your offer not contingent on inspections.
Loans take longer today than they did 10 years ago. Work closely with your mortgage professional well in advance. Submit a full file and understand what is needed. The more complete your file, the quicker the loan will close. If you must ask the seller for a month for a financing contingency, you won’t be competitive with someone who can do it in half the time.