Oro Valley Real Estate - Sellers or Buyers Market
There are a lot of different factors that determine how fast a home sells. One of the biggest ones: market trends. And specifically, whether you’re selling or buying in a seller’s market or a buyer’s market.
What is a Seller’s Market?
A seller’s market is when there are more buyers on the hunt than there are homes for sale. This creates a heavy amount of competition for each home (especially the most desirable ones), and gives seller’s more power and buyer’s less. Someone looking to purchase a home in a seller’s market won’t have as much wiggle room on their offer, and may even have to offer more than the asking price if they want to snag a hot property. Meanwhile, seller’s can price their homes higher, and have much less incentive to agree to buyer contingencies or concessions.
Tips for buying in a seller’s market
Don’t hesitate. With less power on your side, it’s important to make smart decisions when buying in a seller’s market—and to make them fast. Gather as much information about a house as you can before you go for a showing. That way, if you want to move forward you won’t have any lingering questions standing in your way.
Get a pre-approval. Get a mortgage quote and pre-approval as early as you can, and ideally before you ever start searching. A pre-approval lets seller’s know that you’re serious, and also gives you an idea of exactly what you’re working with financially.
Make it personal. Buyers and sellers are people. For that reason, you may want to consider including a personal letter to the seller with your offer that speaks to why you want the property so much and what sets you apart from other buyers. A letter will help set you apart and bring some humanity to an otherwise stark and impersonal offer.
Tips for selling in a seller’s market
Make sure your home looks it’s best. The more appealing your home, the more offers you can expect to get. It definitely pays to put a little time, effort, and possibly cash into making your home look as great as it possibly can.
Set your price a touch lower than you might otherwise. Being strategic with pricing now might end up making you more money later on, since a lower priced home is going to garner a ton of attention which might result in that all-coveted bidding war.
What is a Buyer’s Market?
A buyer’s market is when there are more sellers looking to sell homes than there are buyers looking to buy them. Buyers have a better chance of nagging a sale at or below a home’s market listing, and can also usually sneak in a few extras too, such as having the seller throw in a home warranty or make some cosmetic repairs. And seller’s have to decide whether it’s worth acceding to buyer demands.
Tips for buying in a buyer’s market
Set your sights on homes that have been on the market for a little bit. Sellers of brand new listings are much less likely to budge on price or concessions than those who have been waiting around for a while. You don’t have to limit yourself only to homes with older active listings, but doing so would certainly increase your chances of getting a stellar deal.
Ask the seller to pay your closing costs. Closing costs for home buyers can run as high as 2% to 7% of the home’s purchase price, which is thousands of dollars out of pocket in addition to your down payment. Since it’s a buyer’s market however, it’s worth asking the seller to cover your costs instead, which will save you a lot of money.
Tips for selling in a buyer’s market
Instead of sitting around and waiting for the buyers to come to you, you’re going to have to cast as wider net. In addition to the usual channels like MLS and aggregate listing sites, talk to your real estate agent about coming up with a plan for marketing on social media and other community-focused platforms.
Have your home professionally staged. A professionally staged home may cost you a little bit up front, but it’s going to make a strong impression with the potential buyers who come through your door.
Add in some incentives. Throw in your expertly designed patio furniture or new stainless steel appliances, or offer to pay HOA dues for the first six months after the sale.
The seller’s market vs. buyer’s market dichotomy is something that you should understand. As always, try to go into the process with as strong of a position as possible and you should be able to come out on the other side with few barriers in your way.