5 Critical Tips for Sellers Entering Buyer Market

Selling

5 Critical Tips for Sellers Entering Buyer Market

By Emilio DiSpirito, Team Leader and Realtor of The DiSpirito Team with HomeSmart Professionals

(7 Minute Read)

Homeowners across the country are having a more difficult time selling their homes. In this blog, we will discuss what is causing homes to sit for an extended period of time as well as 5 tips homeowners can use to sell their home in a buyer’s market. 

First off, what is a "Buyer’s Market"? A buyer’s market is when there are more homes on the market than the number of buyers in the marketplace. Properties will tend to stay on the market for an extended amount of time and sell for a lower price and, in some cases, with more concessions in the buyer's favor than a seller's market. 

So, what is a "Seller’s Market"? A seller's market in real estate is when you have more buyers than homes available for sale. This creates a demand which allows home prices to appreciate at accelerated rates as there are multiple buyers bidding on a limited number of properties for sale. 

For the past 9 months, the number of pending transactions has fallen across the United States while the number of homes on the market has increased. Prices and rates have escalated and now the scale is weighing in the buyer's favor. Recently, over the past couple of years, the housing market has experienced the lowest levels of inventory in history with historic low mortgage rates which allowed for a perfect environment for homeowners to sell. Today, that is no longer the case and homeowners looking to obtain top dollar for the sale of their home are advised to take the following steps. 

Dismantle Objections:

With more homes to choose from, buyers are looking for a home that they can move into without the headaches of repairs and they will find one. Buyers will pay more for a home that will require less work than a home that needs routine maintenance. We suggest that homeowners hire a local and reputable home inspector to perform pre-list home inspections. This will allow you to review the repair list with your Realtor to discuss which items will cause buyers concern and could tempt them to walk away. 

Get Your FREE Market Report and Schedule your FREE Seller Consultation with me Now www.Calendly.com/emiliodiv

Make Sure Buyers Can Finance Your Home:

Using your pre-list home inspection report, search for areas that would affect a buyer’s opportunity to finance it. Basically, any home over $475,000 will not typically be affected by this. However, any home under this number will need to take into consideration financing such as FHA, VA, as well as certain programs that vary state by state. In Rhode Island, it is 100% financing through Rhode Island Housing. (See a local mortgage professional for details - message me 401-359-2338 for local RI and MA lenders). The bank will send out an appraiser who will inspect the property to ensure it is safe and of sound structure. They will look for things such as missing or broken handrails, mold, lead, working heating systems, electrical, and plumbing. By reviewing your pre-list home inspection report, you can get your home ready to qualify for any type of financing, providing your budget allows. Keep in mind, the smaller the pool of buyers who are able to buy the property, the less likely you are going to sell at the highest potential price.

First Impressions are Lasting Impressions:

In order to obtain the highest sales price, when walking onto your property for the first time, you need a buyer to see it in its best light. A well-manicured lawn and yard will go a long way. The days are getting shorter, so make sure your walkways are clear and that all of your lighting fixtures are in working order to light the buyer’s way. Take careful notice of chipping exterior paint, wood rot around windows or fascia boarding, and if your roof is on its last leg, replace it when your budget allows. Your roof is one of the only areas you will get a 100% return on investment in nearly all cases. One of the least expensive, yet highest impact items in a home are the aesthetics. A fresh coat of neutral colors in your home will really work wonders for space! I cannot stress enough that painting must be done in the lines and ensure it is done in a professional and neat manner. Amateur paint jobs leave an impression of your home being "Mickey Moused" and will be an immediate turn off for buyers. Other inexpensive things you can do to make the biggest impact is to make sure your home is clean, smells fresh, and is decluttered and staged appropriately! 

Don't Inflate Your Homes Price:

Several months ago, sellers were in the position where the demand was so strong, they could anticipate the up and coming price increases and price their home 1% to 3% higher than the current value in high demand areas. Right now, the opposite thing is happening and the sellers pricing their home at or slightly under the current fair market value are receiving the most amount of traffic and the highest sales prices.

CASE STUDY: Recently, we met with a seller who had a home that needed more work than what she could afford. We had told her that her property was worth $220,000 max with the work needed. However, a very limited number of buyers would even enter the property at that price. We discussed with our client that her home, being on the lower end of the neighborhood’s price point, would be best advertised as an "as-is” sale to really entice buyers to take the home and attract more buyers for a higher offer and better terms. We suggested a price point of $189,900. 57 showings and 11 offers later, we were able to negotiate a cash offer, "as-is", with no contingencies, $60,000 over asking price and $40,000 over what the market suggested for the property in its current state.

 Don't Posture on an Offer:

The days of multiple bids are near complete. Unless your home has a one of a kind view, is priced under market value, is turnkey with the latest amenities and aesthetics, your home will likely be on the market for longer periods of time than what we have previously witnessed. When an offer comes in and your property has been on the market for longer than 4 weeks, make sure you are negotiating a reasonable sales price and terms with the buyer. Posturing and drawing a hard line in the sand without any 'true' further demand on your home will leave you stuck with monthly carrying costs that will add up, in addition to your home’s listing sitting longer on the market. Properties that sit on the market for an extended period of time carry a stigma and buyers begin to question what is wrong with it. Stale listings are overlooked and passed by, by what could be the perfect buyer. 

Get Your FREE Market Report and Schedule your FREE Seller Consultation with me Now www.Calendly.com/emiliodiv