Recent reports claiming that the housing market will slow in the coming year are putting some home sellers on edge. If you plan to sell your home in the next year, it's time to find an experienced local agent who will represent your interests on the market. Knowing the differences between a buyer's and a seller's market ensures that home sellers are informed of what they can expect.
Work with a top agent to help you make sense of your local market to make the right decisions.
Here are six things that buyers should know when parsing the differences between buyer's and seller's markets.
1. History Trends Toward Sellers
Aside from the mortgage crisis in 2008, when home prices drop, it's not usually a global drop. Pricing trends vary from state to state and even vary by zip code. When a region becomes hot, it becomes a seller's market because sellers have the pricing power.
Even if prices drop temporarily, overall they've gone up precipitously at a rate much faster than inflation. From 1968 to 2004, they went up by 6.4% every year. That's why real estate is such a good investment.
Whether you're in a buyer's market or a seller's market, sellers have the option of waiting out cooler markets. Both buyers and sellers should talk to an experienced local agent to see data covering broader trends than just what the market looks like today.
2. Sellers Can Still Get Ahead
The market still chugs along whether it's a buyer's market or a seller's market. There will be competition among sellers during a buyer's market but some sellers will give up and wait it out. If you don't need to sell your home quickly, you can make some quick renovations that will make a difference in how much you can sell for and how quickly.
Boosting your curb appeal and investing in some high-ROI upgrades ensures that your home is more attractive to buyers even when the chips are stacked against you. Fix issues in your kitchen, bathroom, and anything that needs help on the exterior.
Fresh paint, new countertops, and new fixtures in your bathroom don't cost a lot, but can keep buyers from trying to haggle. The more you're willing to invest in your home, the more you can get ahead of other sellers.
3. Buyers Have the Upper Hand in Colder Months
If you're selling a home during the winter months in a region where snowfall and icy roads are common, you will see home prices all around you drop. During this period, there are fewer buyers and sellers are typically more willing to cut a deal. The weeks bookending New Year's Day will be some of the toughest for sellers.
If you can wait it out until the ground thaws out, the market will thaw as well.
Talk to your agent about ways that you can market your home during this time. You don't want your house standing out there in a cold market. The longer it sits on the market, the more that buyers are going to assume there's something wrong with your home.
If it's a buyer's market and it's cold out, you've got two strikes going against you as a seller.
4. Expect More Out of Buyers in a Seller's Market
When you're a seller in a seller's market, you're in the best position. However, don't get too cocky. Other sellers will try to pitch to the same buyers and you still must be competitive.
Check out what the housing supply looks like. If there hasn't been a lot of construction in the region, supply could be down. This creates the conditions for a seller's market and could allow you to take competing offers from buyers dying to get into your home.
In a seller's market, check out that your potential buyers have been pre-approved from a reputable lending institution. Let them know honestly and directly if their offer is too low and work with your agent to build a strong counteroffer that's closer to what you're looking for.
5. A CMA Can Make All the Difference
Knowing what's going on around you makes a huge difference regardless of whether you're in a buyer's market or a seller's market. Find an agent who has data on recent home sales, what's on the market, and where your region is trending.
While some agents will try to charge you or make you sign a contract to get access to a comparative market analysis, top agent offer them at no charge. Working with a great agent allows you to look at the numbers carefully to choose the right price for your home to enter the market with.
6. You'll Have To Negotiate No Matter What
No matter how carefully you look at the data, every buyer is going to try to haggle with you. Expect a series of negotiations in both a buyer's market and a seller's market. If you feel like the first offer is insulting, give a strong counteroffer but don't bother going back and forth forever.
Working with an experienced local agent ensures that you'll have someone in your corner who knows when to play hardball and when you should accept a reasonable offer.
An Experienced Local Agent is Your Best Protection Against a Buyer's Market
When you're selling a home in a buyer's market, having an experienced local agent in your corner ensures that you're protected from low offers and pushy buyer's agents.
Clever Real Estate can connect with a top, local agent and save you money in the process. Our Clever Partner Agents are full-service, experience agents from top brokerages who charge you less than traditional commission.
Working with a Clever Partner Agent helps in a cooler market because you'll only have to pay a low commission of $3,000 or 1% of any home sold over $350,000. This means big savings that can make the difference between making a profit on the sale of your home or not.
Fill out this form and Clever will pair you with one of our Partner Agents who has years of experience working in your neck of the woods and has survived a buyer's market before.