1. Pricing their home too high
A common mistake in a sellers market is overestimating the demand for a property and pricing the home too high thinking that they want to have “room to negotiate”. Just like a buyers market or a neutral market, you can still price yourselves out of the market for the most likely buyer for your home. A strong sellers market is actually the perfect market to UNDER Price your home! Why? The lack of supply makes the market react quickly driving up the purchase price OVER regular market value with multiple offers.
2. Ignoring the competition
Just because the supply is low, sellers shouldn’t ignore the other supply. It should be EASIER to monitor and adjust when there are few competitors on the market.
How is it priced verses the competition? When we help our sellers determine a market value, we look at past sales over the last six months but we also look at current competition. For example: if past sales suggest that you should be able to price your home around $450,000 and based on the current competition on the market of similar homes you would be one of the most expensive homes on the market, we would suggest starting at a lower price that is more inline with current competition reflecting todays market.
How does your home look verses the competition? Visit open houses and think about them like a buyer. Ask your agent to tour comparable properties in your area. Do you have the same updates and upgrades as other homes on the market priced near your home? I encourage sellers to visit as many open houses as you can before your home is listed and while your home is on the market. You want to know what buyers see as they walk though your home and how what they are seeing compares to the competition and other homes on the market in the same location. You have the opportunity to adjust price, condition, and exposure to give yourself the competitive advantage!
3. Rejecting reasonable offers
There is an old saying in real estate that often your first offer is the best offer. This often rings true in a sellers market too. Just because supply is low, the demand for your home specifically, may or may not be high. Every home is different and every offer should be seriously considered. If the offer meets your goals and allows you to make the move you are looking to make, the best thing you can do is take the offer or listen for what the buyer wants and offer a serious counter. A home that has lingered on the market can sometimes have an unintended affect of becoming a stigmatized property, costing the sellers additional equity when buyers assume something is “wrong” with the property and that is why it is still on the market, in a sellers market.
As you look to sell your home in a sellers market, give serious consideration to your competition, your starting price, and any offers that you receive. Small mistakes made in a sellers market could hinder your ability to take advantage of the lack of supply and cash out big on your home equity. Avoid these and the market should move quickly and you should be in a strong position to make the most of your equity.