A seller’s market occurs when there are more buyers than homes available. For example, if a neighborhood has three homes for sale and six buyers, then the sellers have the power.
In a seller’s market, and in most price ranges, homes are going under contract in less than 3 – 6 months. In highly competitive markets, buyers might get into a bidding war, where each buyer keeps offering more for the property until only one person is left. This is an ideal situation for sellers, who want to turn a profit on their homes.
In a seller’s market, most homes sell quickly. A significant number of buyers means the house is more visible. These potential buyers are also motivated to act quickly before the house leaves the market.
How Do You Know If It’s a Seller’s Market?
There are several ways to conduct market research on your own or with the help of a real estate agent to know whether your area is in the midst of a buyer’s or seller’s market.
In a seller’s market, homes are going under contract very quickly. If homes have been on the market for several months, then either the price is too high, the home is not marketed properly with bad photos, or the home is dated or less than ‘move-in ready condition.
However, if most homes have a contract pending after a week or two and there aren’t that many, then the market falls in the seller’s favor. Some of the national websites like Zillow will not indicate to the buying public that the home is under contract. So, it becomes very frustrating from buyers searching on those sites to find available homes.
The Risks of a Seller’s Market (for Sellers)
While a seller’s market might play to a homeowner’s favor, there are some mistakes that people make during the listing process. These can limit how easily you sell your house and how much you can get for it.
A few common risks for sellers include:
- Listing your home too high to the point where buyers find other more desirable and affordable options.
- Turning down quality offers instead of negotiating because you think demand is higher than it is.
- Waiting too long to list your house because you wanted to maximize how much it is worth.
With all of these mistakes, the longer the home stays on the market the harder the homeowner has attracting buyers. In the end, according to national statistics, home sellers will receive less for the house by pricing the home too high and letting the home go stale on the market. Additionally, if a home sits on the market too long, the buyers think there might be issues with the home.
What Should You Do If You Want to Sell During a Seller’s Market?
If you are considering selling your home and are confident that it is a seller’s market, there are a few steps you can take.
- Meet with a real estate professional to determine your home’s expected value and how much you will put in your pocket, after all expenses when it sells.
- Take steps to increase the value of your home by making upgrades and cleaning out clutter.
- Seek the service of a professional real estate agent that includes staging to appeal to more buyers.
- Create a timeline with your agent for when you want to list your home and when you plan to move out.
These steps can ensure that your home is in its best condition when it hits the market and that it gets listed for a reasonable price. This increases the chances that the house sells quickly and you can move out before the markets sway out of your favor.
Seller’s Market or Not: Sell Your House for More
Whether it’s a clear seller’s market or not, a professional agent can help you navigate the real estate landscape to get the best deal for your house. A real estate professional can tell you whether your area is in a buyer’s or seller’s market and offer advice for when and how to list.