We’ve been talking about how the market is shifting to a seller’s market for several months. It’s true. We’ve seen the market fully recover since the 2008 crash. This includes the full turn from a buyer’s market.
With that shift, we’ve run into two big myths.
To better prepare you for any real estate transaction you may be considering in a seller’s market, here are those myths debunked:
Sellers: I Can List at Any Price and Get it
Wouldn’t that be great? Trust us, if we thought that was the reality of a seller’s market, we would have retired in 2007.
Ok, that is a bit of an exaggeration.
The reality is that many homeowners approach a seller’s market with a list price much higher than actual value. While there is some truth to the fact that the market is slightly favorable to sellers, it isn’t necessarily reflected in list price.
The first favorable aspect is inventory. Seller’s markets have an increased number of buyers. The difference is a smaller number of homes on the market comparatively. It’s not uncommon for homes in this market dynamic to receive multiple offers. That only happens if a home is competitively priced.
When you list your home price too high, you sabotage your ability to remain competitive in the market. Relisting later or reducing your price isn’t enticing to buyers.
The other component that characterizes a seller’s market is better economic conditions. This means that as a whole the economy has more money. Buyers feel more confident investing into a home. Mortgages are easier to come by because banks are lending.
As a seller, these are favorable conditions. You have more buyers. The market is healthy. There is money to invest in homes. That’s the breakdown of a seller’s market.
Bottom line, market value still defines the best listing price for your home. Just because the market conditions are more favorable, it doesn’t mean you will get above market rate for your home. Educated buyers will pinpoint a home listed over value and move on to other options.
Buyers: I Can’t Get a Good Deal on a Home
This myth is a direct byproduct of sellers who want to price gouge when the market conditions turn. Luckily, buyers who use a trusted realtor can still get a good deal in a seller’s market.
The reality is that homes listed at market value will have more competition.
With better economic conditions encouraging more buyers to the market, you will have other buyers making offers on desirable homes. While it’s not always ideal, this isn’t the end of your home search. It may indicate that you will make several offers before securing your home.
If you work with a trusted agent, you will be able to make a competitive and enticing offer on those homes.
The other thing we find common in this market is that sellers are less likely to pay additional costs like home repairs or closing costs. Particularly if there are other offers on the table, when a buyer requests to opt out of too many of the final costs, a seller will choose to move forward with another offer. During a buyer’s market, you typically see sellers working to negotiate these fees.
The Seller’s Market Reality
Location, market conditions, size, and desirability are the steadfast factors in Coronado that influence home value. No matter the market conditions, homes rarely sell for more than what they are worth.
The key to successfully navigating any real estate market is working with a trusted agent. For sellers, this means having an expert to help you price your home competitively. For buyers, this means having a skilled agent at navigating multiple offer situations.
We are your trusted Coronado experts. When you use one of our ParkLife agents, you can rest assured that you have an experienced agent working for you throughout the entire process.