A common question realtors receive is, “how’s the market?” There are many different ways to answer this question, and one way to look at it is from the lens of a buyer’s versus a seller’s market. Buyer’s and seller’s markets are all about supply and demand. A buyer’s market arises when the supply of homes exceeds the demand. A seller’s market occurs when demand for homes exceeds supply.
The coronavirus pandemic unexpectedly started a fast-growing seller’s market throughout the United States. Pennsylvania experienced the same phenomenon. It was especially strong in the Lehigh Valley and Bucks area since we live in a growing hub between Philadelphia and New York City. We are still experiencing these effects today. Data from November 2022 shows that in Allentown, on average, a home will spend nine days on the market compared to 48 days in Philadelphia or 57 days in Pittsburgh. This shows how hot our region is and why we all still need to look at the real estate market from a seller’s market lens.
No matter what you currently seek from the real estate market, here are some tips to get the best outcome in a seller’s market.
Tips for SELLERS in a seller’s market:
1. Clean and organize your home.
Making sure your home is in good condition, meaning clean and organized, is a great idea before showing the property. Potential buyers want to see a clean home because it makes it easier for them to picture themselves in the space, which can help you get more offers.
2. Make sure your home is fairly priced.
Just because it’s a seller’s market doesn’t mean you will be guaranteed to get offers no matter where your home is priced. You’ll likely attract more buyers if you set your asking price at fair market value.
3. Carefully consider offers.
One of the most important tips for sellers is to consider and understand the financial strength behind all offers. Just focusing on the highest offer could mean accepting an offer that’s not realistic. The last thing a seller wants is to put their home back on the market when an offer falls through.
4. Make sure your buyer is preapproved.
Preapproval means verifying your finances and credit history, which makes for a more trustworthy offer. Sellers should ensure their buyer is preapproved. This makes it far more likely that your buyer will actually be able to pay the money they’re offering.
5. Be aware of contingencies.
Some buyers will have stipulations written into their contract - this is important to pay careful attention to as a seller. If you don't meet these requirements, the buyers can back out, which is never ideal.
Tips for BUYERS in a seller’s market:
1. Act FAST if you find your dream home.
If you found your dream home in a seller’s market, there’s a good chance that it’s multiple other buyers’ dream home, too. One way to give yourself an edge is to get preapproved for a loan. Since the savviest sellers ensure their buyers are preapproved, this could be how you stand out in a bidding war.
2. Understand that you are at a disadvantage.
When there are more buyers than houses, the buyers are often at a disadvantage because sellers are likely to pick the most trustworthy and straightforward offers. If you have certain stipulations to include in the contract, it’s important to consider whether they’re worth losing the house over.
3. If it’s possible, make an all-cash offer.
This one’s simple. Sellers prefer an all-cash offer! That being said, even if you planning on getting a loan, there are ways to structure offers so that it’s not contingent upon getting a mortgage, allowing you to compete with all-cash offers.
4. Be patient.
Don’t offer more than a home is worth just because you’re tired of losing bidding wars. This is never a smart decision.
5. Don’t settle.
Don’t place offers on homes just because they’re available. Considering the implications of buying a home - one being 30 years of mortgage payments - is important. Don’t make your future self regret settling for a home you don’t love.
Whether you are a buyer or a seller, the Rebecca Francis Team is ready to help you conquer the seller’s market. Contact us here.