When it comes to a buyers market, there are generally more homes for sale than there are buyers shopping for homes. As a result, this gives buyers the negotiating power, mainly because a handful of listings are competing with each other to get the attention of relatively a small amount of buyers.
A buyers market most of the time is prompted by low interest rates. Another sign of a buyers market is a having a high percentage of distressed properties available, such as foreclosures and short sales.
In contrast, a sellers market happens when the number of listings on the market is limited, so an assortment of potential buyers are competing for fewer homes, and sellers hold the negotiating power.
Expectations When Selling A Home In A Buyers Market
If you find yourself selling in a buyers market, it’s pivotal to be realistic about how the market will affect both the price you can sell your home for and the amount of time it will take to sell. In a buyers market, homes generally stay on the market longer, price cuts happen more frequently, and homes are sold for less, relative to their listing price.
As mentioned before, when inventory is high, there are also a lot of foreclosures and short sales on the market. If you have a well maintained, cared-for home, this can actually benefit you, because your house will look better than the many “sold as-is” homes flooding the market. Always remember, other sellers know this too, so you can still expect a good amount of competition.
Preparing To Sell In A Tough Market
Selling a home in a buyers market can be an uphill battle, so it’s important to mentally prepare yourself for what can be a stressful process. Make sure you’ll be able to emotionally separate what you love about your home from the feedback you get from buyers, and remind yourself that it’s normal to receive lowball offers in a buyers market.
If and when an offer does come in, do whatever you can to keep the negotiations going, staying open and flexible. Remember to consider the full package. There’s more to selling a home than just the sale price, and entertaining low offers doesn’t make you a desperate seller — it makes you a smart one, as you’re making the most of a cool market.
If you don’t have wiggle room on price, consider other concessions you could make to your buyer, including appliances, offering a convenient close date, or waiving contingencies.
If you are selling and buying at the same time — selling your current home in order to buy a new property—you may want to wait to buy your house until after your current house has sold. Buying is easy in a buyers market, so you should be able to find and purchase a new home quickly.
Home Selling Tips for Listing in a Buyers Market
Sometimes, waiting for market conditions to improve isn’t an option. Here are a few steps to follow to successfully sell your home in a cool buyers market.
Hire an experienced agent
Navigating a tricky local real estate market is infinitely easier with an experienced agent by your side. A great agent can advise you on home updates local buyers love, competitive pricing, successful marketing strategies, and negotiating tactics.
- FSBO alternative: If you’re worried about having to accept a low sale price, you could consider listing your home for sale by owner. You won’t have the expertise of a veteran local agent, but you will cut out the standard 3-percent commission an agent would receive.
Inspect and make repairs
More and more sellers are paying for a home inspection before listing their home so they know ahead of time what challenges they’ll come up against during the negotiation process. With a thorough inspection report in hand, our agents say you can make any deal-breaking improvements before listing, and you’ll be able to identify repairs that might necessitate a price reduction.
Make The Needed Repairs
- Tackle any drastic repairs found in your inspection — like a roof, furnace, or water heater — or expect to come down in price later in the process.
- Fix cosmetic items that might keep your home from making a good first impression. The most common — and relatively affordable — fixes include painting, repairing window screens, and updating fixtures.
Update Your Home to Attract Buyers
Since your home will be competing with other homes in your area for a limited pool of buyers, making the updates that today’s buyers are looking for can really make your home stand out.
While there are some trends that may be more or less popular based on where you live (and your agent is a good resource to identify what buyers in your particular area are in search of), here are a few home features that the majority of recent buyers stated were extremely or very important:
- Air conditioning (76 percent)
- Private outdoor space (70 percent)
- En suite master bathroom (62 percent)
- Their preferred style of kitchen (56 percent)
- Energy efficient features (56 percent)
- Smart home capabilities (27 percent)
Maximize Marketing Strategy
In a buyers market where your home needs to look its your very best, attracting attention to your home’s most attractive features is more crucial than ever before.
Exterior Home Updates
Your home only gets one first impression with a buyer, and usually it’s the view from the curb. Focus on:
- Landscaping: Tidy up garden beds, plant colorful flowers, mow the lawn, and remove any leaves or debris. Twenty-nine percent of recent sellers said they improved their landscaping before selling.
- Pressure washing: Make sure the driveway, walkway, and sidewalk are neat and clean.
- Painting: Take a critical look at your home’s exterior and see if it needs to be repainted. If not a full paint job, perhaps just a new coat of paint on the shutters, doors, or window frames could freshen things up. Twenty-one percent of recent sellers reported painting the exterior of their homes.
- Decorative flourishes: Budget-friendly updates such as a new house number, upgraded light fixtures, or a new mailbox can show that your home has been well maintained.
Interior Home Updates
On average, 79 percent of recent buyers said taking a private tour was extremely or very crucial to their home-buying decision. And 45 percent said the same of having the home free of the seller’s belongings.
Make sure your home’s interior looks its very best for each and every showing.
- Clean and declutter: Our agents recommend you do a deep clean on your house, while also decluttering every room. Remove excess furniture that might be making a room look small, pare down trinkets, and remove personal belongings like photos and keepsakes. And don’t forget about closets and pantries. Sixty-four percent of buyers said that ample storage space was extremely or very important. Think about getting a storage unit and keeping items off-site while your home is on the market.
- Stage the home: In a competitive market, home staging can be an important tool in making your home attractive to buyers. In addition, think about hiring a professional stager to provide their unbiased input and expert recommendations on making each room look its best.
- Wash windows: Make sure that all windows are thoroughly cleaned, both interior and exterior, to let in as much natural light as possible.
How to price a house in a buyers market is especially a bit more difficult. You want to price it competitively to attract the right buyers. Price it a little too high and shoppers won’t come by to visit. Price it a little too low, and it can make you appear desperate and limit how much profit you can turn.
The very best way to know how to price your house to sell is to look at comparable homes that have recently sold in your area. Our agents suggest you focus on homes that are similar in size, location, and features, and work with your real estate professional to come up with a pricing strategy that works.
Understanding Your Pricing Strategy
With some assistance from your real estate agent, think about which pricing strategy will work best for your home:
- At market value: You aim to price your home at exactly what the market says is fair, which sets you up for a smooth, successful appraisal.
- Below market value: Another strategy in a buyers market is to price your home a little (but not too much!) below market value to attract shoppers.
- Above market value: Generally speaking, not your best bet in a buyers market. When you list above market value, not only will you have a difficult time getting the right buyers, but when you do discover a buyer, your home may appraise too low and the deal could fall apart, as lenders won’t finance homes that appraise lower than the sale price.
Avoid Stale Listings
A stale listing is a listing that has a DOM longer than other comparable homes for sale at the same time.
What Is DOM?
DOM refers to “days on market,” and is a usually measurement of the number of days between when a home is first listed and when an offer is accepted. In a very competitive sellers market, the DOM on area homes can be as short as a few days. In a balanced market, it’s more like a few weeks. And, in a buyers market, it can be a few months.