Whether you’re a REALTOR or in the market to buy or sell a home, you often hear about it currently being a buyer’s or seller’s market. However, many do not understand the difference between the two or what these terms mean. Let’s take a quick crash course into the two to give you a better understanding of local real estate market conditions in Southwest Virginia and Northeast Tennessee.
What is a Seller’s Market?
In a seller’s market, there is a surplus of buyers for the low real estate inventory. Therefore, there are not enough homes available to meet the demand, which puts sellers at an advantage. During a seller’s market, homes typically sell faster and often have multiple buyers vying for the same property, resulting in bidding wars. Buyers have less negotiating power and are more willing to purchase a home as-is for a premium price.
Tips for Buying in a Seller’s Market
Time is of the essence when purchasing a property amid a seller’s market. Here are a few tips to help you score the home in a tough real estate market.
- Work with a REALTOR to ensure you don’t miss out on newly listed properties.
- Be prepared by having a pre-approval letter and making sure your finances are in order.
- Act quickly. When you find a home that checks all your boxes, don’t put off making an offer, or you could miss out.
- Don’t get discouraged. If you keep missing out on what feels like the right home, it is important to be patient and not get frustrated. The right one will work out in the end.
- Focus on important must-haves in your offer. Trust your agent to guide you through the offer process and ensure your offer will not put you in an uncomfortable financial situation. While contingencies and concessions could make your offer unfavorable, if these are certain stipulations you must have, make peace that it could cost you the home.
Tips for Selling in a Seller’s Market
Don’t be hesitant to put your home on the market in SW Virginia or NE Tennessee because you’re concerned you won’t find a suitable home to purchase (whether upsizing or downsizing). If all sellers would just go ahead and list, then the GRIDLOCK we’re experiencing now would ease up. Your Highlands Realty agent can help you draft an agreement that won’t leave you homeless! We’ll add a provision in your contract that states you don’t have to sell if you can’t find a home to purchase within a certain time frame.
While sellers have an advantage during a seller’s market, they should know some of the best tactics to make their home stand out from others.
- Declutter and keep your home looking its best. Before putting your home on the market, you want to ensure it shows well to attract more potential buyers.
- Price fairly. Although homes tend to sell for more in a seller’s market, it still is beneficial to start the asking price near the fair market value that your REALTOR recommends. Pricing your home just right is key regardless of the market, but in a seller’s market, it a good idea to stay within the fair market value range to attract the most interested buyers.
- Consider offers carefully. You will often see multiple offer situations during a seller’s market because of the overwhelming demand for the low supply of real estate inventory. Your real estate agent will offer advice to help you decide the best offer to accept in these situations, but you want to consider not only the offer price but any contingencies or concessions stated in the contract. Contingencies can allow a buyer to back out of the contract if certain conditions aren’t met, which could set you back on selling your property. Therefore, it is important to pay close attention to these when making your final decision.
What is a Buyer’s Market?
When there are plenty of homes for sale and not enough interested buyers, it creates a buyer’s market. Since there is a surplus of homes, you often see lower real estate prices and homes sitting on the market for longer because the demand does not match the surplus of homes available.
Buying Tips in a Buyer’s Market
Since prices are usually lower and there are fewer buyers to compete with, buyers have an advantage in a buyer’s market.
- Use your REALTOR’s knowledge of the local market to determine the best price to offer. They will know if a house is priced right or if there is room to negotiate a lower price.
- Know all your options to ensure you find your ideal home, and it gives you better negotiating power by understanding the pros and cons of similar properties.
- Watch the days on the market closely. The longer the home has been on the market, the better chance that the sellers will be more motivated to sell and are willing to accept a lower price and consider concessions or contingencies.
Seller Tips in a Buyer’s Market
When selling in a buyer’s market, you must do everything you can to make your home stand out in the competitive market.
- Make repairs before listing your home. Buyers can be pickier, so they expect homes without the need for minor improvements when they purchase.
- Depersonalize and Declutter. You want buyers to imagine themselves living in the home, and it is easier for them to do if the space is not personalized for someone else. Spend extra time sprucing up the interior and landscaping to ensure it shows its best upon listing. Hiring a stager can create a cohesive and polished look that impresses the potential buyers and helps your home stand out from the rest.
- List with a REALTOR who is a pro at marketing. Having an agent on your side with marketing expertise and uses multiple advertising channels is essential to connecting interested buyers to your property.
After learning more about a seller’s and buyer’s market, it is clear that Southwest Virginia and Northeast Tennessee are experiencing a seller’s market. We have an overwhelming number of buyers, but there are not enough homes for sale. Therefore, if you’ve been waiting for a good time to sell, now is the time. There is likely a buyer, or multiple buyers, currently waiting for a property like yours to hit the market. Contact our agents to find out what your home is worth in today’s market and learn how they can help guide you to the closing table.