The seller’s market is set to continue in Michigan in 2018, and in most other areas across the country. In a seller’s market there are more buyers than there are homes for sale, which drives the price of homes up. Every home seller hopes for this, though most don’t take advantage of it as well as they could. So how can you use the seller’s market to maximize your home price? Here’s what you need to know when selling a house in a seller’s market, and how you can compete with the most attractive homes.
6 Things You Need To Know When Selling a House in a Seller’s Market
1. Know Your Competition
In a seller’s market there are more buyers than sellers, however the best homes will still go faster. Look at comparable homes in your area to see what you need to know about your own home when selling in a seller’s market. Does your home have similar features?
Remember that certain home updates can make a big difference in your home price, and they can be especially tempting to certain buyers. Noticeable visual updates are particularly important to some buyers; a home with a sleek and shiny new kitchen or luxurious bathroom will win over buyers faster than a lackluster space of the same size. If nearby homes have these features, you don’t necessarily have to remodel, but it will be helpful to update these rooms with some modern home design trends.
Consider the following when looking at comparable homes;
- Kitchen or bathroom updates
- New roofs
- Yard features
- Home additions
- New siding
- Basement or attic conversions
- Deck, patio or porch
- New windows
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2. Know Your Negotiating Position
It’s often overlooked, but your negotiating position is important to know when selling your home in a seller’s market. When you know what makes your home valuable and any problems home buyers might point out, you can be ready for anything. This includes homes that are live-in ready as well as fixer-uppers.
Live-In Ready: If your home doesn’t have any major defects, the condition of your home is a major selling point. Tell your realtor about your your home updates so they can point them out to buyers, and highlight the updates with staging and pictures as well. If you live in a growing, sought-after neighborhood, a neighborhood with good schools, or other features, add this to your negotiating position as well.
Fixer Upper: When selling a house that needs work, your home’s features, amenities and condition won’t be a major part of your negotiating strategy. However, your neighborhood might be. If you live in an up-and-coming neighborhood, you have good schools, or the properties nearby are significantly more expensive, highlight the potential for buyers to get into a good area and build equity.
3. Know Your Buyers
The best thing to know when selling a house in a seller’s market is to know your ideal buyer. Who is looking at your home? There are as many types of buyers as there are types of homes, and knowing who is most interested will help you sell your home faster.
You can make an educated guess about who is looking at your home by the location, price, amenities, and condition. Consider the following common types of buyers and ask yourself who will be most interested in your home.
First-Time Buyer: Usually newly married couples, these buyers want a safe neighborhood, but it doesn’t need a lot of amenities, and they’re probably not as concerned with the quality of schools yet. Their ideal home needs some updates but nothing major, has a small yard in a nondescript area, and it’s in a lower price bracket.
Move-Up Buyer: Move-Up Buyers are usually families growing out of their current space. They’re looking for more square footage and more bedrooms, a bigger yard, a safe neighborhood, and good schools. They want to invest time in their growing family, and they’re less likely to take on big home renovations.
House Flipper: These buyers make a business out of buying, improving, and selling homes for profit. They’ll be willing to take on home projects most other buyers won’t. Savvy house flippers will know when a home needs too much work, but a bidding war between competing house flippers is great news for homes in rough condition.
Neighborhood Hunter: This buyer’s number one priority is getting into a great neighborhood. They might be looking for schools, to be close to work, or to build equity in a good community. These buyers are ideal for homes that don’t have the same features as their neighbors’.
Relocator: The Relocator is usually moving for a job, and they might be buying a home from a distance. Closing the sale within the right time frame is therefore important to them, and they also want to be in a safe neighborhood that is close to their workplace.
Equity Builder: Equity Builders are similar to House Flippers, except they’ll actually live in the house while they fix it. These buyers are ready for a project, but they draw the line at anything that makes the home especially difficult to live in or sell.
Dream Home Buyers: These buyers are looking for a certain home and, though they have a price ceiling, it’s probably flexible if they can get what they want. They don’t want a project or improvements, and may have specific amenities, square footage, number of bedrooms and other features that must be met.
4. Know What Buyers Think of Your Home
Try to look at your home objectively and see what prospective buyers see. Seeing what buyers see will show you what you need to know when selling your house in a seller’s market, and changes you may need to make.
When you live in your house and see it every day, you can become blind to problems that might turn off buyers. If you find it difficult to assess your home objectively, ask your friends for help. Those that don’t live in the house will be able to point out issues you might not see.
Ask your friends about any of the following;
- Is there any strange odor anywhere in the house?
- Is the decor modern?
- Is the space neutral? Can they see themselves living there?
- What do they immediately notice in each room?
- Did they notice any cracks, off-color spots, pests, soft spots in the floor, or other issues?
- What features do they especially like?
- Would they want to live in this home? Why or why not?
5. Know When To Sell
Timing is an important thing to know when selling a house in a seller’s market. Spring and summer are ideal times to put your house for sale, since there are more buyers and your home will look more attractive. Remember, to sell your home in the spring or summer, you should have all preliminary steps completed by the end of winter. If you are buying a home contingent on selling yours, you’ll want to coordinate preliminary buying and selling activities well in advance to get the timing right.
You don’t always have complete control over timing, and you can still successfully sell your home in the fall or winter if you have to. There are fewer homes on the market in the fall and winter, and buyers during this time generally have to move, so they’ll be more serious. If other nearby homes repeatedly upstage you and steal your offers, it may be helpful to sell in the winter when the real estate market is slower. Stage your home for winter buyers and you can make your home stand out.
6. Know Your Price Points
Whether you have a large home with the latest amenities or a small fixer-upper, finding the right listing price is one of the most important things to know when selling a home in a seller’s market. Your home’s listing price should be accurate, but it should also be priced with your buyers in mind. Remember that most buyers start their home search online within a price range, and where you set your price will determine which searches you appear in.
Most buyers set their price caps at round numbers like $100,000, $200,000 or in between at $150,000. If your home is just over these numbers at $107,000 or $155,000, you may be missing a pivotal group of buyers. Contrastingly, if your home is set just under these price breaks, like $99,000 or $148,000, your home will look like a bargain, which can set off a bidding war. Ask your realtor about your ideal buyers, their price ranges, and comparable homes in the area to find the perfect listing price.
A seller’s market means you have the advantage and you have a chance to get the maximum value for your home. But some homeowners take a seller’s market for granted; they don’t prepare and they end up leaving money on the table. What to know when selling a house in a seller’s market can make a difference between maximum and average value.
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