5 Key Factors That Define a Seller’s Market
When you decide to sell your home, understanding the market conditions can help you make informed decisions about when to list it and when to accept an offer. Some sellers must move quickly, while others have a more flexible timeline. In either case, working with the best realtors in the Spokane, Washington, area can help you tailor your approach to selling based on whether the current market favors buyers or sellers. So how can you tell if now is a good time to list?
- Demand Is Greater Than Supply
A seller’s market, at its simplest, is when the number of people who want to buy a home is disproportionately greater than the number of homes available on the market. This creates competition between buyers to obtain a limited number of homes, which means sellers can demand higher prices. In some cases, sellers can sell their homes above their asking price.
However, garnering the maximum price can depend on whether your home falls within the range of the most desirable homes. For example, there is always a limited market for very high-end homes because fewer people can afford them, while homes in the middle range tend to attract more interest. If you want an idea of your home’s sale value, you can submit a request for a home valuation on the Legacy Group website.
Several conditions can increase demand in a geographic area. Sometimes, a local economic boom can spur an influx of people relocating to the area. A slowdown in new home construction can create a time lag in which homes are not coming onto the market as fast as people need them. Another factor that can stimulate home demand is when interest rates are low. Homebuyers may accelerate their plans to purchase a home to take advantage of low rates.
- Homes Sell Faster
Another feature of a seller’s market is that homes move more quickly, sometimes spending only a few days or weeks on the market. When demand is high, buyers are more likely to make a move when they find a desirable home, lest another buyer comes in and closes a deal ahead of them. In a seller’s market, the “snooze, you lose” mentality definitely rules the day.
- Fewer Buyers Negotiate Sale Terms
In addition to being less likely to bid low on a home, buyers in a seller’s market are more likely to simplify their offers by forgoing negotiations. They may be less picky about demanding repairs or altering the contract terms; some buyers will even waive their right to have a property inspection. When sellers entertain multiple bids, they can afford to be choosy. A savvy buyer’s agent will determine what is essential to the seller and tailor the offer to the seller’s priorities. This may include things like making a cash offer, offering a short escrow period, being willing to do a rent-back, and so on. Buyers who need more “hand-holding,” such as those wanting a contingent offer or who do not have financing in place, will find it challenging to have their offers accepted.
- Sellers Can Entertain Multiple Offers
If you list your home during a seller’s market, you are more likely to find yourself being able to compare offers. The best and the most desirable offer may be more than just the one with the highest price. If the market is favorable, a good seller’s agent will work with the seller to create conditions for an ideal sale, such as setting a bid deadline for multiple interested buyers. By entertaining multiple offers simultaneously, buyers will not compete in terms of who bids first but instead on offering the most attractive terms, including price. This strategy can save both buyers and sellers from lengthy negotiations.
- A Buyer’s Market May Follow
The housing market always experiences ups and downs. While conditions in a seller’s market can allow you to get a relatively high price on your home within a short time, these conditions do not last forever. In addition, there are often seasonal factors at play. For example, family homes sell better in the summer when buyers and sellers do not have to worry about disrupting their children’s school schedules. In other cases, listing your house in the winter may make sense when there are fewer houses on the market.
Get Advice From the Best Realtors
There are signs that indicate when it is an ideal time to sell, but you do not always have the luxury of picking an ideal time. Even in a seller’s market, a seller may hesitate to list if it means they must turn around and purchase a new home in the same market. In addition, some markets may have contrary indicators – for example, even when supply is low and demand is high, some buyers may take their time in making offers if they anticipate that interest rates may go down.
If you are thinking about listing your home, talk to a realtor about the different factors that can affect the saleability of your home. It’s not always the best idea to wait until the “perfect time” to sell, so don’t twist yourself into knots if you need to make a move. Making good decisions for yourself and your family are not always about maximizing your financial benefit. A good real estate agent will help you take advantage of whatever market forces are out there to ensure you sell your home for a good price in an acceptable time frame. For key insights on preparing your home for sale, listing your home, and comparing offers, contact Legacy Group Real Estate.