A seller’s market happens when demand exceeds supply. When there are more buyers, but real estate inventory is low. Since there are fewer homes available, sellers are at an advantage. We have definitely been in a Seller’s Market for many months now.
In a seller’s market, homes sell faster, and buyers compete in order to score a property. These market conditions often make buyers willing to spend more on a home than they would otherwise. Therefore, sellers can raise their asking prices. Furthermore, the increased interest means that buyers rarely have the power to negotiate and are more willing to accept properties as-is.
Due to the shortage of housing, these conditions often lead to multiple offers. During these bidding wars, buyers will make competing offers and drive up the price, typically above what the seller initially asked for.
Tips For Buyers
Whenever there is a low inventory of houses on the market and an abundance of buyers, timing is crucial.
Act fast: If you find your dream home during a seller’s market, you will have to act fast. If you hem and haw over a house you want to buy, you may find that it’s no longer available by the time you make an offer. You should get preapproved for a loan ahead of time, so your financing is in order when you need it.
Know that you’re at a disadvantage: When it comes to making an offer, keep in mind that you’re the one at a disadvantage. A seller’s market is not the time to try to push contingencies, concessions, specific closing dates or repairs. Focus your attention on what’s most important to you. If there are certain stipulations you want written into the contract, think hard about whether they are worth losing the property over. If you can make an all-cash offer, you should. Sellers prefer buyers who are willing to pay in cash because they don’t have to worry about the deal falling through due to issues with financing.
Be patient: If you find that you keep losing out on the homes you’re interested in, it’s crucial to be patient and not get discouraged. Many buyers end up suffering during a seller’s market because they get frustrated. Inexperienced buyers caught up in multiple offers will often offer more money than a home is actually worth – or they feel comfortable spending – in order to get the home they want. That’s always a mistake.
Don’t settle: On the flip side, some buyers will end up making offers on homes they otherwise wouldn’t be interested in because they’re tired of losing out. Remember, buying any property is a huge investment and often a 30-year commitment. Don’t settle on a home just because it’s cheaper. Unless you have to move immediately, it’s a much better idea to wait it out and resume your home search after the market cools down.
Tips For Sellers
Since sellers must compete to attract buyers in a seller’s market, it’s helpful to know how to increase interest in your property.
Clean and organize: To begin, make sure that your home is in good condition and has been cleaned and organized before you list, market, or show the property.
Price fairly: Even though homes tend to sell for more money in a seller’s market, it still helps to price your home fairly. If you set your asking price at or slightly below fair market value, you are likely to attract more interested buyers. Some sellers choose to list their homes for slightly less than the assessed value in order to encourage multiple offers.
Carefully consider offers: It’s even more important during a seller’s market that you carefully review the offers you receive. Sellers are often so focused on choosing the highest offer that they fail to examine the financial strength of each buyer. Just because buyers say they’ll pay a certain amount for your home doesn’t guarantee they’ll actually be able to obtain those funds. Lenders will not allow buyers to borrow more than the assessed value of your home.
The last thing you want is to accept an unrealistic offer and be forced to put your home back on the market when the deal falls through. The longer your home is on the market, the more questionable it will seem to buyers, and the more power they will have when negotiating. For ALL these reasons, is why you need an experienced real estate agent.
Ensure preapproval: For any buyers who require financing, you should ensure that they have been preapproved for a loan. Preapproval requires that buyers’ finances and credit history are verified, making it far more likely they’ll ultimately be able to obtain a loan for a specific amount of money. Prequalification, on the other hand, is just an estimate of buyers’ finances.
Be aware of contingencies: Also, be on the lookout for offers that include contingencies. Offers that include stipulations, like mortgage contingencies, home sale contingencies, appraisal contingencies, and inspection contingencies, enable buyers to back out of sales contracts if certain conditions aren’t met.
Is It A Buyer’s Market Or A Seller’s Market?
In the North Georgia area, it is definitely a Seller’s Market. The inventory of homes for sale is at an all-time low which is preventing some potential sellers to list their property. Here are some things to consider if you are one of those sellers:
- Consider new construction. Often times you will have a more definitive timeframe and have somewhere to move.
- Consider renting for a while. Yes, it may require two moves, but will also give you time to find just the right property.
- Consider moving in with family. Not the most ideal situation, but some have the extra space and would agree for a limited time.
- Go on an extended vacation. Have an RV or rent one? With work from anywhere situations, this might be the opportunity to travel until the market has more inventory.
- If you have a beach/mountain rental, use it until you find your next forever home.
Bottom line is, if you can be flexible, you can take advantage of getting top dollar for your current home and still find your next home. Give me a call and let’s work out a plan for you.
Experience, Passion, and Commitment to Excellence