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If you’re a real estate owner who has been eyeing the perfect time to sell your property, you may feel like you have hit the jackpot.
After all, many market commentators are currently describing Australia’s property market as a seller’s market – arguably a fabulous time to sell off your home or investment property.
Not only will your days on the market likely be fewer, but it also means you can get multiple offers, which can potentially boost the sales price of your property.
Not sure what a seller’s market means? Not to worry. Read this article to learn what it means to be in a seller’s market and how you can capitalise on it.
What is a seller’s market?
Basically, a seller’s market is created when demand exceeds supply. In a seller’s market, properties take a shorter time to sell, and buyers must compete with each other in order to secure a property.
In Australia, the unprecedented seller’s market is caused by record-high levels of buyer demand outpacing the number of available properties on the market. The country’s historically low interest rates have also inspired many Aussie buyers to step into the market – far exceeding the available inventory of properties for sale.
Due to the shortage of supply, many buyers are forced to join in bidding wars. During bidding wars, buyers will make competing offers and drive up the price, typically above what the seller initially asked for.
The competitive market conditions often make buyers willing to spend more on a property than they would. Therefore, sellers have the opportunity to boost their asking prices. Additionally, the increased interest means that buyers almost have no power to negotiate properties and are more willing to pay for a property as-is.
And while this is all good news for sellers, you’ll still need to be strategic if you want to sell your property for the most money possible.
How to spot if your local market is a seller’s market
Here are signs to look out for to know if you are in a seller’s market:
Tips for selling your property in a seller’s market
You may think all you have to do is stick a sign in the yard or put your property in an online listing and let the market take care of the rest.
While it might be easier to sell in a seller’s market, there are things you can do to make sure you get the best money for your property.
1. Keep your price fair.
We understand that with home buyers willing to pay just about anything to get a slice of the property market pie, it feels like a good idea to increase your sale price above the average market value of your property.
However, most real estate experts would advise that the smart move would be to keep your price competitive. If you set your asking price at or slightly below the fair market value, this can encourage multiple showings, and you are likely to attract more interested buyers. If you receive multiple offers, a bidding war can ensue, which can drive up the asking price.
2. Prepare your property for sale.
Remember that in a seller’s market, buyers are desperate for a property and are often willing to overlook cosmetic flaws and are even willing to foot a heavy repair bill. A seller in a hot market has a better chance of selling a home “as-is” without having to make major updates.
Before you decide to make any significant fixes to the property before listing, it’s recommended to have a discussion with your real estate agent to evaluate comparable properties in your neighbourhood. If you end up overcapitalising on your renovations and repairs, you may find yourself losing more money than you can make from the sale.
If you want to get multiple offers on your property right after listing it, home staging is probably the best way to make that happen. In a seller’s market, buyers need to move quickly and are driven by first impressions and emotions.
There is no better way to make someone fall in love with your house than to stage it. Giving your property a “wow” factor will make it stand out from the rest of the pack and give it an even better advantage over any other homes that might go on the market at the same time.
If you can’t afford to stage, at the bare minimum, the property should be de-cluttered and thoroughly cleaned from top to bottom in preparation for showings.
3. Prepare for multiple offers.
You need to have a game plan ready in case buyers fight over your property. If you get a lot of offers, consider each bid with your agent to determine which is the best fit.
Sellers are often so focused on choosing the highest offer that they fail to examine the financial strength of each buyer. However, the highest dollar amount doesn’t always win.
After all the offers are received, make notes on each offer so they are easier to compare. Don’t focus only on the price offered, but other factors as well, such as:
For example, one buyer might be willing to pay significantly more than your asking price but include several contingencies in their offer, such as closing costs assistance. On the other hand, another buyer might offer slightly less than the asking price, yet not ask for anything extra or do not try to negotiate for anything else.
4. Ensure pre-approval.
Don’t be blinded by unrealistically high offers. After all, not all that glitters is gold. Just because a buyer says they’ll pay a certain amount for your home doesn’t guarantee they’ll actually be able to obtain those funds. Remember that lenders will not allow buyers to borrow more than the assessed value of your home.
The last thing you want is to accept an unrealistic offer and be forced to put your home back on the market when the deal falls through. For any buyers who require financing, ensure that they have been preapproved for a loan.
Pre-approval requires that buyers’ finances and credit history are verified, making it far more likely they’ll ultimately be able to obtain a loan for a specific amount of money. Meanwhile, pre-qualification is just an estimate of buyers’ finances.
5. Be aware of contingencies.
Be on the lookout for offers that include contingencies. Offers that have stipulations attached to them, such as mortgage contingencies, home sale contingencies, appraisal contingencies, and inspection contingencies, allow buyers to back out of sales contracts if certain conditions aren’t met.
A real estate agent is a licensed professional authorised to act as a representative for buyers or sellers in a property transaction.