Although 2020 put us all through the wringer, the one bright light that remained was the steady climb of the real estate market. From people moving to new cities to families purchasing their forever home, home purchases remained quite steady amid the uncertainty caused by the pandemic. The good news? Experts are predicting another strong year for the housing market as we walk gracefully into 2021. The biggest prediction is that supply will be in high demand as potential buyers look to secure their purchase after holding out due to the unknowns of the pandemic. As restrictions, across all states, start to loosen, buyers are becoming more trustworthy of what their future has in store. This is big news for current and potential sellers. 2021 is sure to be a seller’s market kind of year.
What is a seller’s market?
In short, a seller’s market comes to fruition when home demand exceeds the overall home supply. In other words, buyer’s demand for purchase is high while the overall inventory of active homes for sale is low. Because there are fewer homes to choose from, sellers are at an automatic advantage in the market. In a seller’s market buyers have to scour inventory quickly and make offer decisions faster than in a buyer’s market. There is higher buyer competition in a seller’s market as well.
Often, homes receive multiple offers at competitive prices that can result in a bidding war between multiple buyers. In a seller’s market, you will also see buyers sign off on appraisal waivers, home inspections, and foot the bill for the closing costs or any other cost not directly associated with the home purchase price.
How do I stand out as a seller?
With an influx of sellers in the market, it can be difficult to shine amongst your competition. A lot of times, sellers just think that pricing your home appropriately for the market will get the job done, but there’s more to it if you want to make top dollar for your home.
Here are my tips to stand out in a seller’s market:
- Clean and organize your home. Put your home’s best foot forward by showing off. Don’t leave clutter throughout your home as it will be a major distraction and no-no for potential buyers. If you are still living in your home consider taking down overly personal items prior to showings and tucking things neatly away out of the buyer’s eye. A well-organized home will allow a potential buyer to see the bones of the home more easily.
- Take care of major repairs. Big-cost repairs are a big turnoff for potential buyers. Although there are some who love a good fixer-upper, major repairs steer many people away from submitting an offer. Take care of the big-ticket repairs prior to listing your home for sale. New updates will come at a cost advantage to you as you will be able to sell your home for more once the projects are completed. Taking care of them now will make a home inspection a breeze. Take a look at things like roofs, heating and/or cooling systems, solar panels, or windows. Smaller, more minute, changes can be thrown to the wayside a bit. Don’t worry too much about small patches in the wall from photos or wall color, these can easily be updated by the next owner.
- Highlight the best parts of your home. When you’re ready to list your homework with your realtor to highlight the best parts of what you have to offer. Whether it’s an inground pool or vaulted ceilings throughout, make sure to include those pieces in the description. Take quality photos and show off the best pieces. This will attract more buyers to want to schedule a showing ASAP.
- Focus on a fair price. Although you’re at an advantage as a seller, overpricing your home isn’t beneficial for you. Instead, focus on a fair asking price. Listing your home for at or just below market value will attract the highest number of buyers. Listing just below asking is a powerful way to attract those buyers who will bid above the asking price in hopes of securing the deal.
What offer do I choose?
When it comes to reviewing offers on your home, choose wisely. Although the highest bid may seem appealing, make sure to check the fine print before diving headfirst into acceptance. Remember that just because someone offers way above the asking price does not mean they can afford to pay that total. If they’re using a home loan, lenders will not allow them to borrow more than the home assessed price. They may be able to foot the out-of-pocket cost of the difference, but ask and know this in advance of full acceptance. You don’t want to accept an unreasonable offer that will fall out of escrow, forcing you to put your home back on the market.
When thumbing through offers take close notice of:
- Offer type (full cash, VA, conventional)
- Financial stability to include down payment amount, closing costs, and HOA fees (if applicable)
- Personal letter to the buyer
- Earnest money amount
- Waivers (inspection, contingencies)
I’m on the fence… How do I know if it’s the right time to sell?
If you’re looking to take advantage of the current seller’s market, now may be the right time to take the leap. There are various factors to consider including home appraisal value, personal home and life plans for the next 5 years and next home purchase goal. You will also want to look into current mortgage rates and purchasing power for your next location. I would love to help you navigate the waters to understand if now is the right time for you to sell in your current market. Contact me today.