Selling property in a buyer’s market is no easy feat, with the odds not exactly in a vendor’s favour. Here are our tips on how you can secure the best deal when selling under these conditions.
In a buyer’s market, there are more properties for sale than there are buyers shopping for homes.
This gives home buyers the upper hand when it’s time to negotiate, as the higher number of listings enter a fierce competition with others to get the attention of relatively few home buyers.
And while a buyer’s market sounds like a good time for people looking to purchase real estate, a buyer’s market doesn’t exactly sound like an ideal setting when adding a “for sale sign” on your property.
Property owners who find themselves in this type of market should 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.
This is because in a buyer’s market, properties generally stay longer on the market place and a higher proportion of houses with a “sale sign” are sold at a discounted price.
If you find yourself selling your home or investment property under these conditions, here are some helpful tips for home sellers in a market where buyers have more negotiating leverage.
What is a buyer’s market?
As we’ve mentioned, there is a larger supply of homes for sale than there are buyers in a buyer’s market. This means that overall conditions are in favour of home buyers.
Here are the main signs that you are selling in a buyer’s market:
- Inventory levels are above average
- New home construction is on the rise (indicating high supply levels)
- It takes a longer time to sell
- Properties are sold at or below the listing price
- Property values are declining
- A high percentage of distressed properties available, like foreclosures and short sales
- A low number of average offers for properties
- Lack of or no bidding wars at auctions
What does a buyer’s market mean for sellers? Typically, sellers should expect to:
- Reduce their sale price
- Offer incentives to close the deal
- Your property may sit on the market for a longer period of time
- There is a lot of competition in the local property market
- Not getting multiple offers
Should you sell your property in a buyer’s market?
With vendors generally at a disadvantage under these conditions, should you try to sell in a buyer’s market?
Most experts advise waiting out a buyer’s market if you’re selling your property. This is the best course of action, particularly for property owners that find their homes are sitting on the market for extended periods of time.
As we’ve stated in our previous article: How to purchase property in a buyer’s market, it’s important to remember that markets have a cyclical nature. This means that even the longest seller’s or buyer’s market will eventually end as market dynamics change.
This also means that the market’s tide could turn in favour of sellers in just a few months, which could help you sell your house or unit faster.
Additionally, remember that there are markets within markets across the country. This means that while your local market is now a buyer’s market, there are areas where the conditions are just shifting in favour of sellers.
And on that note, we recommend consulting with a real estate agent, as they’ll have their finger on the pulse of local market conditions and can offer you specific strategies for successfully buying or selling in your area.
If you prefer doing things unassisted, we advise keeping a close eye on vital data and trends (e.g. listings, demand and supply, etc.) that can help you navigate the market in order to get the best deal with the best price for your property.
Tips for selling your home in a buyer’s market
Of course, retreating from a buyer’s market is not a piece of advice that is suitable for everyone, as circumstances can vary greatly from one person to another.
If you’re still reading this article, chances are, you need to sell your home for financial or personal reasons — even with odds stacked against you.
But just because it’s a disadvantageous market, you don’t have to let buyers walk all over you. Here are our top tips for selling your property in a buyer’s market.
- Make sure the price is right
Before you list your property, make sure that your price tag is based on comparable sales in your area.
By pricing your property competitively (meaning it is either on par with or lower than comparable properties in your area), you will be able to get good price offers from potential buyers.
- Get your property in its tip-top shape
It’s no secret that a well-presented home sells better and faster. This is even more important in a buyer’s market.
In a competitive market, buyers are hawk-eyed about small details like light fixtures and window furnishings. On that note, prioritise and choose the details and repairs that will be most profitable for sale.
Make sure to also clean out the property and depersonalise it to allow buyers to visualise themselves in their homes. If there is room in your budget, you can also choose to stage your property.
- Slash the price tag rather than pay for repairs
In a buyer’s market, purchasers have the pick of the housing litter. This means they can be extra pushy when demanding things before they say “yes” to the deal, such as repair work.
While it’s easy to make further concessions just to seal a deal, we recommend a more strategic approach when it comes to repairs.
First, hire an inspector yourself to identify problems that you should fix before listing. If your property has no notable repairs needed, taking this extra step will theoretically allow your home to smoothly go through the appraisal and inspection process once you have a genuinely interested buyer.
But if the inspection reveals issues that you don’t want to deal with fixing or can’t afford to fix, what do you do? Rather than organise the repairs yourself, you can compromise by reducing the sale price to cover the costs.
This way, you can reach settlement day more quickly and even sidestep the stress of dealing with tradies and contractors.
- Be flexible with your settlement terms
Selling under these conditions also means you need to be more flexible. Since sellers have less power to negotiate in a buyer’s market, you should consider offering to pay a portion of the closing costs and for any repairs requested in order to seal the deal.
Being willing to change your move-out date or price, leave appliances, or make other concessions can all help to fast-track the settlement date. In order to maximise the number of buyers who see your property, you should also be flexible about showing times.
Your marketing will matter even more than it would in a buyer’s market. But at the same time, you need to be smart and lower your expenses.
So how do you hit two birds with one stone? If you want to save more money but don’t want to compromise your reach to potential buyers, focus on online marketing rather than print marketing.
Advertising on online property portals and social media can not only reel in serious buyers who are sleuthing the digital world for good property buys but is also very cost-effective.
Selling your house in a buyer’s market can be frustrating and stressful, as potential buyers can come and go, and even those who are interested can be picky about your property. This can make you feel powerless and borderline desperate at times.
With that, it’s important to remember that the sale process is not an emotional affair and try not to take things personally.
You need to have a lot of patience when selling under these circumstances. In some instances, you also have to accept that the market will determine the terms of the sale of your property.
Article source: www.smartpropertyinvestment.com.au