Pricing your home in a seller’s market is one of the biggest challenges you will face as a homeowner. A price that is too high could turn off prospective buyers and delay the sale of your home for months while pricing your home too low could eat into your profit margin. Fortunately, there are some simple measures you can take to ensure that you get the most out of your investment. Below is a look at the key features of a seller’s market and your five-step guide to pricing your home in a seller’s market.
What exactly is a seller’s market?
“Simply put, it’s a market where there are more home buyers than sellers. Based on basic laws of supply and demand, this means sellers have the upper hand: They will likely sell their place quickly, perhaps for over asking price, with a minimum of fuss or pushback from buyers.”
– Daniel Bortz, Realtor.com
Knowing the features of a seller’s market is vital to helping you price your home when there is an abundance of buyers. A seller’s market is beneficial for sellers because they are more apt to sell their home quickly and for a price that is higher than asking price. Here are some of the key features of a seller’s market:
- Demand for homes outpaces the supply of available homes for sale
- Sellers are often able to command prices that are higher than asking price
- Buyers are more willing to compromise or make concessions when negotiating
- Sellers may receive multiple offers on their property within a short period of time
- The sales cycle in a seller’s market is often shorter
What steps can you take to price your home properly?
Pricing a home in a seller’s market is a skill that is best exhibited by an experienced real estate professional. Whether you decide to seek the services of a trained realtor or attempt to sell your home on your own, you should make sure not to blindly forge ahead with a price that you “think” sounds reasonable. By following the five steps below, you can help ensure that you enjoy the perks of a seller’s market.
1) Do your homework
A general understanding of current market conditions is the cornerstone of a sound pricing strategy. Before you entertain pricing options for your home, you must first determine whether you are actually in a seller’s market and set aside some time each day to devote to market research. Failure to do your homework can cause you to leave money on the table or severely delay the sale of your home.
2) Determine how long homes in your area have been on the market
If the average length of time that homes in your neighborhood have been on the market is less than 10 days, you are likely in a seller’s market. You can determine how long most homes are sitting on the market by using some of the free tools available on sites such as Realtor.com. Be sure to monitor this average every few days to note any significant changes.
3) Compare the sale price of homes in your area to the original asking prices
If you notice that the majority of homes are selling for more money than asking price, that is another sign that you should not start with an asking price that is lower than asking price. As you compare sale prices with asking prices, you should also keep an eye on the overall average home price in your area. If that figure is on the rise, then you are well positioned to command a price that is higher than the assessed value of your home.
4) Be prepared to receive multiple offers
If you are clearly in a seller’s market and have priced your home at its assessed value, you are likely to receive multiple offers from interested buyers. You may even receive several offers within a matter of days, highlighting the need for you to avoid eagerly accepting the very first offer that lands in your lap. Instead, you need to be prepared to respond to multiple interested buyers and carefully review each one.
5) Know your options
“Sellers generally have three options: Accept the offer as presented; Decline the offer (This is best accomplished by actually telling the buyer agent why the seller is declining the offer; some seller’s agents may decide not to respond, a tactic that has risks.); Offer a “counter-proposal” to close a gap between the asking and the offered price.”
– Andrew Wetzel, Inman
Knowing the rules of negotiation is critical to ensuring that you do not leave money on the table or accept an offer that is too low. As you decide whether you wish to accept, decline, or counter an offer you have received, you should always consider the following factors:
- Timing and deadlines: If you are facing a deadline or need to vacate your home quickly, accepting or countering are usually better options
- The buyer’s needs: If your home has a rare feature your buyer needs (an elevator, for instance), you can often afford to counter or decline
- Recent activity: If you have noticed that interest in your home seems to be declining, you should use more discretion when declining offers
What is the single best way to price your home in a seller’s market?
As outlined above, there are many steps you can take to price your home to sell. However, the single best way to price your home in a seller’s market is to enlist the support of a seasoned real estate professional. An experienced real estate agent will have the market expertise needed to guide you on an attractive asking price. Realtors work in the market every day and are familiar with the latest pricing trends and strategies. They are also skilled negotiators who can help you carefully review each offer on the table.
The trusted real estate agents with MovingTo904.com serve home buyers and sellers in the Jacksonville area every day. Our team stays abreast of the latest pricing trends and strategies, and are ready to help you price your home to sell – regardless of market conditions. We invite you to contact us at MovingTo904.com to learn why we are Jacksonville’s most trusted real estate firm. We look forward to hearing from you!