How Can We Take Advantage of a Seller's Market for Home Selling?

couple with sold sign in living room next to boxes
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Question: How Can We Take Advantage of a Seller's Market for Home Selling?

A readers asks: "We've been hearing from friends that we have a seller's market in our area right now, and they're saying it's a really good time to sell a home. I take that to mean that we can get more money now than maybe we could have earlier this year. Is that true? And if it is true, what can we do to make sure we maximize our profits in a seller's market? Should we fix up our home, we've been talking about new carpeting. Any help you could give us would be appreciated. How can we take advantage of a seller's market for home selling?"

Answer: Selling a home is a seller's market is far different from selling a home in a buyer's market. If you are lucky enough to be experiencing a seller's market in your area, it is indeed a fabulous time to sell. Not only will your days on market be remarkably fewer in a sellers's market, but you might receive multiple offers, which could drive up the sales price.

It's generally a good idea to take advantage of pent-up demand because it's the demand that drives competition. The larger number of buyers for your home ought to increase the odds you'll make more money. Some homes, especially those referred to as unique homes, meaning homes that can be difficult to sell in any real estate market, will generally stand a better chance of selling as well in a seller's market.

Ways to Attract Multiple Offers in a Seller's Market

Some people might think that all you have to do is stick a sign in the yard and let the market take care of the rest.

It might be easier to sell in a seller's market but it takes a lot more to sell a home than hanging a sign out front. It requires strategy. Here is my strategy for home selling in a seller's market:

  • Prepare the home for sale. This may or may not involve home staging, but it absolutely should include cleaning the home from top to bottom. Buyers will overlook small defects in a seller's market because there are not enough homes on the market -- they have no choice. Your home will sell faster with new carpeting if the existing carpeting is worn, but generally bad carpeting will not stop a buyer's desire in a seller's market.
  • Go on the market on a Friday. Friday is the best day of the week for home selling. I like to set my listings to "go live" on Thursday night at midnight so buyers will discover them among the new listings when they get up Friday morning. All the photos are color-corrected and perfected to make the online presentation sizzle. I upload the virtual tour, if the home lends itself, and set four-color fliers in a holder by the front door.
  • Limit showings. People tend to want what they are told they can't have. Don't let anybody tour your home at all hours of the day. Restrict the hours and the days. This will force some buyers to tour when other buyers are also present, which should spark a competitive nature.
  • Lower the sales price. If you set the price a hair under market value, this will attract more buyers. It also will leave some wiggle room for buyers to begin bidding over the asking price.
  • Set a time for offer presentation. Let buyers know that you will review all offers on a certain day at a certain time. Buyers won't wait forever for a response, so don't make them wait longer than necessary or your strategy could backfire and they might withdraw the offer before that date and time.

    Review Seller's Market Offers

    After all of the offers are received, I make notes on each offer so the seller will know not only the sales price but other factors such as:

    • The amount of the earnest money deposit
    • Whether the offer is all cash or, if financed, the proposed type of financing
    • Amount of down payment
    • Waiver of standard buyer inspections or contingencies
    • Seller costs, including proposal to pay the buyer's closing costs
    • Unusual requests or allowances

    Some buyers will send me photographs of themselves, often including their pets or their children. They might write letters to the seller, talking about why they want to buy the home and sharing a bit of personal information.

    After the seller has had a chance to digest this information, the seller has choices. The seller can:

    • Accept the offer the seller likes the best, or
    • Issue a counter offer to one buyer or more than one buyer, or
    • Ask all buyers to resubmit highest and best offers, or
    • Adjust the sales price and look for more offers

    Usually, the seller can find an acceptable offer among the multiple offers. It is not always the highest offer but if it is financed, it is the offer the seller believes is sufficient to meet the buyer's lender's appraised value. If the home does not appraise, it generally doesn't matter how much more the buyer offered. It needs to appraise because few buyers are willing to bridge a deficient gap in an appraisal and pay a lot more than market value.

    At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.