A “buyer’s market” happens when people looking to buy a home have a stronger bargaining position than the sellers have. In a classic economic sense, a buyer’s market occurs when the supply of homes available for sale exceeds the demand for them. However, other things in real estate create a buyer’s market.
Causes Of A Buyer’s Market
Besides having too many homes for sale and too few buyers, a buyer’s market in real estate may come from widespread credit market problems. There may be plenty of buyers interested in homes that are for sale, yet they may not be able to get a loan to buy the home. This may be caused not only by the credit history and qualifications of the buyers but also by the lending institutions’ available funding to make loans.
Another thing that can cause a buyer’s market for homes to suddenly emerge is a major relocation or closing of a large employer in an area. If the jobs disappear for many people, then they may have to move to find work.
Ways to determine if a specific area is a buyer’s market include tracking the median number of days that homes stay for sale on the market listings. Another strong indicator is the number of homes that lower their listing price.
Selling A Home In A Buyer’s Market
In a buyer’s market, trying to sell a home may be much more challenging. Here are our tips to sell a home in a buyer’s market:
- Price: To be competitive, price the home at a very compelling level that is up to 5% less than the market value of comparable properties.
- Staging: Stage the home to be in a perfect immaculate condition with extremely attractive interior design elements. Remove everything from the home, repaint, and then rent brand-new furniture. Use the services of a professional interior designer to make the home aesthetically stunning.
- Paint: Paint the home inside and out. Use contemporary colors in a trending color scheme that is attractive for the most potential buyers. Avoid brash colors. Color choices should be neutral but not boring.
- Home Inspection: Conduct a professional pre-inspection of the home, fix all the items that need repair, and show the inspection report and the receipts for the work done to any potential buyers.
- Home Warranty: Offer a one-year home warranty included in the sale price, which covers the major appliances and home systems.
- Energy-Efficiency: Install energy-efficient windows, seal around windows and doors to prevent leaks, and upgrade insulation to make the monthly utility bills as low as possible.
- Use a Top Real Estate Agent: Work with an agent that has a track record of selling homes recently, who is a “closer” when it comes to making a sale.
Summary
If possible, try to avoid selling a home in a buyer’s market and wait for a better time. If that is not possible, or the market is permanently damaged and will be a buyer’s market for a long time, then take these steps to give your home advantages when compared to other homes that are for sale.