Making the sale in an extreme seller’s market
stories by Janet Lees
Selling your home in a seller’s market might seem like a no-brainer: just put the sign out and let the hot market take care of the rest. Yes, it’s a fabulous time to sell; your days on the market will be substantially fewer than they would be in a buyer’s market, and you might even receive multiple offers driving up the sale price. However, being a seller in today’s market is far more complicated than you might think.
Here are some tips to help you capitalize on the current market.
1. Move Quickly
It might be tempting to wait to list your home once prices hit a certain peak, but waiting could mean losing out on the market’s momentum. Seller’s markets don’t last forever, so it’s important to move quickly and decisively catch the window of opportunity to sell your home in the shortest time at the best possible price before the market changes.
“It’s generally a good idea to take advantage of pent-up demand because it’s the demand that drives competition,” says Greg Syrota of Royal LePage Trinity Realty. “The larger number of buyers for your home ought to increase the odds you’ll make more money. Most homes, especially those referred to as unique homes – meaning homes that can be difficult to sell in any real estate market – will generally stand a better chance of selling well in a seller’s market.”
2. Prep, But Don’t Over-Prep
In a buyer’s market, the best strategy is to invest some time and money to beautify your home to make it more attractive to buyers. While showing your home to its best possible advantage is still a worthy strategy in a seller’s market, fewer homes on the market means less competition from other homes for sale, so your home doesn’t have to be perfect.
Do quick updates and avoid lengthy renovations so you can catch the seller’s market while it lasts. For example, if the existing carpeting is worn, your home might sell faster and you may even net a higher price with new carpeting, but generally, worn carpeting will not hold you back from selling your home in a seller’s market.
Although buyers will overlook small defects in today’s seller’s market, curb appeal, minor fixes, decluttering and cleaning your home from top to bottom will help you get top dollar for your home. “You want buyers to fall in love with your home the moment they pull up,” says Syrota. “Decorate the front entrance, install new light fixtures, fix any leaking taps, paint where it is needed, and declutter.”
Decluttering doesn’t mean filling up the basement or garage with boxes – that only defeats the purpose. Syrota recommends renting a storage unit to keep all areas in your home clutter-free.
Staging is also worth the effort. “Buyers are attracted to homes that feel bright and spacious,” he says, adding that staging is also a worthwhile investment even in a seller’s market. “If you don’t have the time or decorating know-how to stage your home, hire a professional stager to help you,” he advises. “Even in today’s seller’s market, I’ve seen staging help sell a home for even more money by attracting more offers.”
3. Find Creative Ways to Sell Now
One of the reasons for the lack of inventory right now is that sellers are reluctant to list their homes because they are worried that if they sell they will not be able to find something else to buy. But remember, in a seller’s market, you have the upper hand, and there are creative ways to make the market work for you.
If you haven’t found another home to buy yet, or if you need to sell your home before you can buy another home without conditions, you can make it a condition of your listing that buyers must complete the sales transaction quickly so you get your money sooner, or you can even require them to allow you to rent back the home on a month-to-month basis until you are ready to move.
You can also use financing to buy first and sell later. “One option I recommend is setting up bridge financing using the equity in the current home for the down payment on the new home,” says Syrota. “Negotiate a long closing on the new home, so you have time to list and sell your current home with the same or close closing date. A second option is setting up a secured line of credit to buy, which can be paid back when the current home sells.”
4. Price Your Home Strategically
Today’s buyers are eager but not gullible, so you have to be strategic to get the best price. For example, if you set the price a hair under market value, this will often attract more buyers. It will also leave some wiggle room for buyers to begin bidding over the asking price. “There are actually two strategies in a seller’s market,” explains Syrota. “The first is to price at or slightly below fair market value and let buyers get into a bidding war to push up the price. The second is to price about three to four per cent above fair market value and wait for an offer to come in. You will likely get close to the same price either way.”
5. Consider Early Offers
Sometimes a buyer comes forward in the first week with a great offer and the seller turns it down thinking better offers will come, but they don’t materialize. In fact, the sellers often never even get the same offer again.
“Think twice before turning down the first offer,” warns Syrota. “The first offer is often the best because there is plenty of excitement around brand new listings and buyers will offer their top price in an effort to beat out the competition. Once the new listing excitement has passed and showings slow down, buyers may feel they have more bargaining power, so they may offer less than their top dollar.”
6. Don’t Get Greedy
Have you noticed that even in this seller’s market there are some houses that languish on the market? That’s because those sellers set their price too high. Buyers know the market and they will not be duped into paying too much.
“Once a high-priced house sits on the market for over a month, buyers lose interest,” explains Syrota. “They may even begin to think that if the house hasn’t sold there must be something wrong with it. It’s a type of crowd mentality – buyers want to buy properties that everyone else wants.”
7. Capitalize on “New Listing Hysteria”
If your home is priced right, you will be able to take advantage of what’s known in the industry as ‘new listing hysteria’ which, in this hot market, could help you sell your home in the first week.
“When a new listing comes on the market, particularly in areas such as central Collingwood or Thornbury, there is an initial hysteria as buyers swarm the property,” explains Syrota. “If the property is reasonably priced, this could lead to a bidding war. If there are no offers by the end of the first week, chances are your home is priced too high and buyers have moved on.”
8. Hire an Experienced Realtor
Realtors aren’t smarter than you, but they are trained in real estate law and know how to generate and manage offers in a way that is strategic, legal and will get you the best price. Realtors know the game – the market, strategies, considerations and process – and they can use that knowledge to your advantage.
A great realtor can make the difference between an acceptable offer and a truly profitable offer. “For most people your home is your largest asset, so use your realtor’s experience to help price, stage and market your home,” says Syrota. “Lean on their experience to handle multiple offers, avoid pitfalls, and include clauses or conditions in your offer to protect you.”
9. Assess Each Offer
Before you toast to receiving a great offer, take the time to look it over carefully, paying close attention to the details outlined in the offer. Before you accept any offer, do your due diligence; make sure the details are all in order to prevent any unwelcome surprises that could cause the deal to fall through.
If you receive multiple offers, don’t just look at which offer is highest; there may be other factors that make one offer more attractive than the others, such as financing preapproval, deposit amount, lack of conditions, closing date, etc. It’s important to assess, with your realtor, each of the offers to ensure that you are choosing the best offer that meets your needs.
There are definitely worse things you could do than sell your home in a super hot seller’s market, but it’s important to be prepared, keep a cool head and remain realistic. If you plan and execute your strategy, you could even surpass your expectations for a speedy and profitable sale. ❧
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