By Elizabeth Waintraub, updated on October 10, 2021, reviewed by Andy Smith, fact-checked by Hans Jaspersen.
High Demand Drivers
Generally speaking, it’s a good idea to capitalize on pent-up demand, as it drives competition. Having more people looking to buy a home should increase your chances of making more money on the sale.
Note: Some homes, especially those that people consider unique and hard to sell in any real estate market, will typically have a better chance of selling in a seller’s market as well.
In some seller’s markets, the number of homes available for sale may be few and far between. If there aren’t many choices, the most attractive homes will draw the most attention, but the unattractive homes will sell simply because there aren’t many options.
Another factor that can lead to increased demand is low mortgage interest rates. In 2020, which was covered by the COVID-19 pandemic, interest rates dropped to record lows. A report by Genworth, a mortgage insurance provider, found that the number of new homebuyers increased by 14% over the previous year.
How to Attract Multiple Offers in a Seller’s Market
Some people may think that all you need to do is put a sign in the yard and let the market handle the rest. It may be easier to sell in a seller’s market, but selling a home successfully requires a lot more than just putting a sign in front of it. It requires strategy.
Preparing the Home for Sale
Preparing your home for sale may or may not involve staging the home for showings, but it certainly includes cleaning it from top to bottom. Buyers will overlook minor flaws in a seller’s market because there aren’t many homes to choose from.
Your home will sell faster if it has new carpet if the existing carpet is worn out, but generally, bad carpeting won’t deter an interested buyer in a seller’s market. However, you might want to restrict carpeting to the bedrooms and consider the appearance of wood in other areas.
Going to Market on Friday
Friday is generally the best day of the week to sell a home. One good strategy is to have listings go “live” Thursday night at midnight so that buyers discover them among the new listings when they wake up Friday morning. Be sure to correct colors and enhance online presentation.
Don’t forget to upload a virtual tour if the home allows for it, and issue digital ads on Facebook and other sites.
Limiting Showings
People tend to want what they believe they can’t have. Don’t allow showings of your home at all hours of the day – limit the hours and days. This will force some buyers to tour when other buyers are present as well, which can heighten the competitive nature.
Reducing the Listing Price
If you set the price slightly below market value, this will attract more buyers. It will also leave some leeway for buyers to start bidding over the asking price. It’s not necessary, but it is a strategy that works well in some markets.
Not Setting a Time to Review Offers
If you inform buyers that you will review all offers on a specific day at a specific time, you will lose some buyers. Buyers don’t want to wait to find out if their offers will be accepted. There is also a large group of buyers who say they don’t want to engage in multiple offers. By the time they find out, they are already involved elsewhere.
Review
Seller’s Market Offers
After receiving all offers, make notes on each offer so you can easily compare them. Don’t just look at the offered price, but also at other factors such as:
- Amount of earnest deposit
- Whether the offer is cash fully – or if financed, the type of financing proposed
- Amount of down payment
- Clearing standard inspections for the buyer or contingency terms
- Seller costs, including a possible proposal to pay the buyer’s closing costs
- Unusual requests or concessions
Some buyers may try to use a strategy to play on your emotions as a seller: sending pictures of themselves, including their children or pets. They might write you a letter telling you why they want to buy the house and sharing some personal information.
Tip: If you receive personal messages, read them to see if they are genuine messages or just copies from the internet.
Accepting an Offer
Once you have the opportunity to absorb this information, you have some options as a seller. You can:
- Accept the offer you like best
- Make a counteroffer to one or more buyers
- Request all buyers to resubmit their highest and best offers
- Adjust the sale price and seek more offers
Usually, a seller can find an acceptable offer among the initial offers submitted. It’s not always the highest offer, but if it is financed, it is the offer that the seller believes is sufficient to meet the appraised value by the buyer’s lender.
If the home is not appraised at the offered price, it usually doesn’t matter how much more the buyer offered. The financing won’t cover it, and not every buyer is willing to make up the difference in the appraisal and pay more than the market value.
Frequently Asked Questions (FAQs)
How long does a seller’s market last?
The simple, baffling answer to this question is that a seller’s market will last as long as demand exceeds supply. There are many factors affecting supply and demand, and it is very difficult to predict how long the market will last, but that doesn’t stop analysts from trying to guess.
In a seller’s market, who pays closing costs?
One of the things that the seller and buyer negotiate is who pays the closing costs. The details will be delineated in the purchase agreement. However, in a seller’s market, you can expect the buyer to pay closing costs, as there is a higher than usual demand.
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Sources:
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts in our articles. Read our editorial process to learn more about how we fact-check and maintain the accuracy, reliability, and quality of our content.
Gino Worth. “New Home Buyers Market Report.”
Source: https://www.thebalancemoney.com/home-selling-sellers-market-1798979
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