Seller’s market, what does THAT mean to you if YOU are the seller? The first thing you need to know in a seller’s market is what it is NOT! It is not a time to try to sell your home “as is”. It is NOT a time to ignore the advice of your local real estate professional (Deb St John!) and wait until you get your offer to consider if you will be doing any repairs or inspections! It is NOT a time to think you can be a hardliner with your price, especially if you have priced your home a little higher than the comparable closed SOLDS.
We real estate folks call it a Seller’s Market when there is less than six months of available inventory. The formula for determining months of inventory availability is our job. Just ask any agent and they know. When there is low inventory it is a case of supply and demand. Fewer homes, more buyers than homes available puts the seller’s into the favored position of being able to ask for what they need. Many people think that if there is low inventory (and that is the case right now) that they can risk asking over what a home or property is worth. Not necessarily so! Any property that will be attached by a mortgage will HAVE to pass an appraisal at the contract price. So if the seller has overpriced, and the buyer agrees, that’s rosey but the appraisal must agree too, or there may be more negotiations in your future. Appraisers hold considerable “power” over the transaction. The appraisers have spent thousands of hours determining how to best value a property and frankly they have all the power in valuation, unless it is a cash sale and the buyer doesn’t care what the appraised value will be! If the appraisal is higher than the contract price then the buyer still can win. But if it is lower than contract agreement, then the seller and the buyer go back to the bargaining table to determine who will make up the difference. Often the buyer will bring in a little extra cash to close, but the seller usually is compelled to reconsider his pricing.
In a Seller’s market it is still important to have your property looking the best you can. CLEAN, NEAT and REPAIRED are the first steps you can take to be sure you are ready. Seller’s are best advised to do everything they can to help themselves by having all inspections done up front ahead of any offer. It is also highly recommended that anything that is broken should be repaired, any leaks, repaired, any thing at ALL that is of a health and safety issue be REPAIRED before going on the market. Also, any wood pests, dry rot or roofing issues be clearly addressed by the contractor of YOUR choice ahead of going live in a fast paced market. This puts the seller in the best position to negotiate price. If the house is clean, repaired, staged and ready, then the buyers may (and usually DO) pay nearly asking price at the worse, and sometimes in this market they will even pay MORE than asking to get that nicely “readied” home.
THEN, YOU WIN!