Housing markets often are labelled as a “seller’s” market or a “buyer’s” market or whether they’re “up” or “down.” Earlier this year the outlook for real estate in 2020 was extremely positive towards a seller’s or up market. First home buyers were extremely active with the implementation of the First Home Loan Deposit Scheme along with other incentives. Investor purchases were rising quickly. Interest rates at all time lows. The rate of new listings was growing with overall property prices on the rise and the rate of sale happening quicker than average. However, the housing market is in constant fluctuation. This is because a range of factors influence the market on a weekly basis, including economic conditions, employment rates, weather, holidays, time of year and more. Already this year we have seen devastating bush fires, flooding, and a world-wide pandemic that quickly turned the market on its head into a buyers or down market.
In an seller’s market, homes sell relatively quickly and often at or above asking price. In down markets, homes often require price adjustments and tend to sit unsold for longer periods of time. While selling a house in a buyer’s market is more difficult sometimes we see the market settling somewhere in between making it confusing about what to do.
One constant that always rings true regardless of the market, is that if you present your house well and price it correctly, you will find there are quality buyers.
Whilst it is true that the enquiry rate has dropped slightly in the last month on the flip side the private inspection rate has increased. Of course open home inspections are currently not allowed but private one on one inspections are still permitted. What we’re finding is that the quality of these inspections has improved as most people who are taking the time to book a private inspection and more likely to be genuinely interested.
So, what steps can be taken when selling a house in a buyer’s market?
Remember that in a buyer’s market, there are opportunities to make the most of a tougher selling market to in fact improve your returns.
Many vendors selling a house in a buyer’s market do so without really knowing what this means, or because they must sell. This results in them becoming a victim of low demand/high supply and selling way below what the property is worth.
This is where you have an opportunity to still achieve strong results in the sale of your house if you approach it differently…
Clean the Clutter
It is imperative to remove all clutter from the home before showing it to potential buyers because buyers need to be able to picture themselves in the space. This might include removing some furniture or unused items that you may be storing to make rooms look bigger. Put away excess family photographs and personal items. Ensure everything has a home and is not left stored on benches and open shelves, this will make it seem it cleaner as well. Books and DVDs that you aren’t using anymore can be given away. Check out the Clark Clutter Buster checklist here for more ideas.
Improve The First Impressions
Sellers often overlook the importance of their home’s first impression at the entrance of the property. The first thing a buyer sees is a home’s external appearance and the way it fits into the surrounding neighbourhood. Where possible, try to ensure the exterior has a fresh coat of paint, and that the bushes and lawn are well maintained, consider putting fresh bark or mulch over older garden beds to give it a fresher look. In real estate, the first impressions are everything.
Hiring Professional Agents
Selling in a buyer’s market requires a higher level of strategic thinking and skills in negotiation to get the best net outcome. A great agent will be able to communicate how they approach selling in such a market differently, so make sure you ask plenty of questions in the consultation period with prospective agents. In a market where competition is high, it is important to do the work for buyers. Do not let them hunt out reasons to buy your property, make those reasons clear. If you have hidden features in your home (solar panels, recycled building materials, energy-efficient features) or significant selling points (land size, aspect, natural light, development approval etc.), these should be used as major selling points. Buyers can search for properties based on keywords (i.e. swimming pool), so make sure your property descriptions include all relevant keywords that a buyer may search for.
Have an Accurate Price.
It is important that a Comparative Market Analysis is conducted to ascertain the expected price of the property. Finding a good agent is pivotal for finding and settling on an appropriate price, as they should have a strong knowledge of the local market.
Sweeten the Deal
Another way to make the home and deal more attractive to buyers is to offer things or terms that might sweeten the deal for them. For example, sellers that offer the buyer a couple of thousand dollars credit toward closing costs, or offer to pay closing costs entirely will in some cases receive more attention from house hunters looking at similar homes. In a down market, buyers are looking for a deal, so do your best to make them feel they are getting one.
Another tip is to offer a transferable home warranty, which will cover appliances, such as air conditioners and dishwashers that fail. Depending on the policy, other appliances and house gadgets may be covered as well. A potential buyer may feel more at ease knowing that he or she will be covered against such problems, which could make your home more attractive than a competing home. You could offer cash for future home improvements or the option to close in a short amount of time this may set your deal apart and get you a contract. Home sellers must advertise any sweeteners being offered aggressively.
There are tools available to help sell a house in a down market. Film a virtual tour of your home, and post the footage on social media sites and video-sharing sites. Create a social media webpage for your house and provide pertinent details, such as the number of bedrooms and baths, square footage, and a link to contact your listing agent. Thanks to the Internet, you can attract potential home buyers who are miles away.
You need to make your home as appealing as possible in a down market, and this is where staging can help. Make sure each room has a clear purpose and is free of clutter, and arrange the furniture around a focal point, such as a fireplace. If you need help with this task, hire a professional staging company, which offers design consultation among its services. Their fees may be set or based on the selling price or square footage of your home. Professional stagers also can provide temporary furnishing during the period of their contracted services.
Turn a Negative into a Positive
Just as you are going to be selling a home in a buyer’s market, you may buying a home in a buyer’s market. Knowing this, try to achieve as high a price as possible in the sale of your house (through these steps!). Remember that any price adjustments you need to make are likely being made on properties that you wish to buy. Do your research as you may find that your net position is actually better off with the price adjustments.
The Bottom Line
Selling your home in a buyers market does require a little extra work. Do everything you can to get the home in excellent shape and be prepared to make some small concessions at closing.
These tips, coupled with an attractive price, will increase the odds of getting your home sold.