Making the Most of a Seller’s Market
Conventional wisdom points to this being a buyer’s market because of historically low interest rates and home prices. However, in actuality, it’s a seller’s market – for the relatively small number of homeowners who have decided this is the time to put their home on the market.
Why do sellers have the upper hand and how can you capitalize?
The main reason is there is simply less inventory on the market today. Many sellers have decided they will wait a year or two to list their homes in the hope they can sell for a higher price in the future. According to a survey by Redfin, 61% of those asked think it’s a good time to buy vs. just 13% who think it’s a good time to sell.
Although buyer traffic declined slightly in July, the imbalance between the number of buyers and sellers continues, and experts believe it will remain through 2012.
Another reason fewer homeowners are selling is because many remain underwater on their homes and don’t see a financial upside to selling right now. In a nutshell, sellers have no urgency to list their homes if they won’t break-even or come out of the sale with enough equity to buy another home.
Some experts are now projecting cycles of robust demand followed by cooling periods. These cooling periods are created by price increases that release homeowners from underwater positions so they can list their homes and add inventory to the market.
Making a Seller’s Market Work for Your Business
1. It may be a good time to reconnect with sellers who have been reluctant to get into the market to let them know of the positive trending in inventory and pricing. The timing may be right for them to take advantage if they are in a hot area or in a price range that’s in demand.
2. Set expectations with buyers on the changes in the market. It’s not like 2008 or 2009. Sellers currently in the market are usually not desperate. Instead, they are experiencing bidding wars and multiple offers from which they can choose. Buyers may need to be willing Quick decisions and a willingness to pay asking price may be the new reality for buyers.
In this highly competitive market, it’s even more vital to work with a lender that is experienced and knowledgeable and that works with local appraisers who really understand the complexities of your market.
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