With the right strategy, help from a local agent, and some TLC to your home, you can find a great buyer, even when the market is cool.
In a buyers market, there are more homes for sale than there are buyers shopping for homes. This gives buyers the negotiating power, because many listings are competing with each other to get the attention of relatively few buyers. A buyers market is often prompted by low interest rates. Another sign of a buyers market is a having a high percentage of distressed properties available, like foreclosures and short sales.
In contrast, a sellers market happens when the number of listings on the market is limited, so many buyers are competing for fewer homes, and sellers hold the negotiating power.
To determine the state of your local market, you can look at current inventory, talk to your real estate agent, or research market trend data on Zillow.
While most major metropolitan areas have been sellers markets recently, buyers markets are out there. If you find yourself selling in a buyers market, it’s important 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 occur more frequently, and homes are sold for less, relative to their listing price.
Here’s an example using Zillow data from 2018. In July, 18 percent of listings in a typical buyers market had at least one price cut, compared to 16.9 percent of listings in a sellers market. And, in a buyers market, the median number of days a home was on the market (from listing on Zillow to closing) was 73.5 days, compared to 61.6 days in a sellers market.
As mentioned earlier, 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. Remember, other sellers know this too, so you can still expect plenty of competition.
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.
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.
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.
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.
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, you can make any deal-breaking improvements before listing, and you'll be able to identify repairs that might necessitate a price reduction.
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 surveyed by Zillow said were extremely or very important:
In a buyers market where your home needs to look its absolute best, drawing attention to your home's most attractive features is more important than ever.
Your home only gets one first impression with a buyer, and usually it’s the view from the curb. Focus on:
According to the Zillow Consumer Housing Trends Report, 79 percent of recent buyers said taking a private tour was extremely or very important 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.
A whopping 79 percent of recent buyers reported searching for homes on the internet, so having a complete online listing that really shows off your home's best features is an absolute must.
How to price a house in a buyers market is especially challenging. You want to price it competitively to attract buyers. Price it a little too high and shoppers won't visit. Price it a little too low, and it can make you appear desperate and limit how much profit you can turn.
The best way to know how to price your house to sell is to look at comparable homes that have recently sold in your area. 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.
With help from your agent, consider which pricing strategy will work best for your home:
A stale listing is a listing that has a DOM longer than other comparable homes for sale at the same time.
DOM refers to “days on market,” and is a measurement of the number of days between when a home is first listed and when an offer is accepted. In a highly competitive sellers market, the DOM on area homes can be as short as a few days. In a balanced market, it’s likely a few weeks. And, in a buyers market, it can be a few months.
While the average days on the market varies based on the state of your local real estate market, your listing may be considered stale when most of the other comparable properties have sold, and your home is still available. Another sign is when you experience a significant drop off in online views, tour appointments, and open house attendance.
If your home listing has turned stale, consider removing it. If your schedule and finances allow, consider waiting a few months and relisting your home when market conditions may be more favorable.
Part of winning the sale in a cool market is understanding the needs of your buyer. Consider sweetening the deal with incentives that speak to common buyer challenges.
Written by
Kristijonas Umbrasas
11.26.2019
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