Ten Tips for Buyers and Sellers in Hot Markets
Sellers love hot markets because they mean fewer days on market, keener competition, and a higher sale price. However, many sellers believe they can just throw their home on the market and offers automatically come. This is only true for sellers dumping property under value. Sellers who want the highest price must do some work to take advantage of a hot market. Consider these as a starting point:
Paint, carpet, and floors: It’s time to refresh your home! Consult a staging and color expert to determine the best colors to match the decor and furniture. Carpets need to be professionally steam cleaned or replaced if they cannot come clean. Floors should washed, refinished, or replaced if damaged.
Staging. While great staging is never inexpensive, a dollar spent on staging often returns many more dollars from a higher sale price. This is not the time to go cheap or to seek out a low bidder; find a quality stager with contacts in the home improvement trades and in the furniture rental world.
Underpricing the competition. While counter-intuitive, pricing slightly lower than the competition creates a lot of buyer excitement. This excitement often leads to bidding wars, taking the final sale price over the asking price. How much to underprice depends on the market and the competition; ask a competent real estate broker for advice.
Pre-listing inspections. Have a pre-listing inspection, repair or disclose all issues found, and make the report available to potential buyers! The report should be updated to show any repairs, as this tells buyers that you care about the property and want to ensure that the home is a great value. Pre-listing inspection reports also encourage buyers to consider waiving the home inspection contingency.
Home warranties. Home warranties have not yet caught on in southeastern Wisconsin. These warranties cover expensive issues arising after the sale of the property like bad appliances and other home repairs. Combined with pre-listing inspections, a home warranty gives buyers peace of mind and encourages higher offer prices.
Buyers, hot markets mean keen competition, higher prices, and having to move fast to win. Unless you get lucky and find a seller who ignored everything above, you will need to be creative in how you approach sellers. Here are ways to improve your chances to get the hottest properties.
Be quick and decisive. Second showings are a rare luxury in the hottest markets. Buyers who win houses in these markets are quick, decisive, and ready to make an offer with, or just after, the first showing.
Overbid the asking price. While overbidding should only be done when the property is clearly worth the additional money, offers over asking definitely makes sellers sit up and take notice.
Love letters: Tugging on a seller’s heart strings can make up for a less-than-impressive offer or make a great offer absolutely stunning. These letters should explain why you love the house, how it fits your family or life, etc. Photos sometimes help to personalize an otherwise sterile offer.
Fewer contingencies: Contingencies mean time and money to a seller. Consider whether extra tests and extra contingencies are truly worth putting into your offer.
Higher down payments: The best real estate brokers review financing contingencies. They counsel their sellers that a higher down payment is a stronger buyer who is more likely to close.
Whether you are buying, selling, or doing both, it will be my pleasure to help you fight and win in the best markets! Please let me know how I can be of assistance and I will get to work for you today!