As the spring market begins, inventory is tight and well-priced homes are selling very quickly. The signs that we are in a seller's market are everywhere. Southern Maine has not experienced a true seller's market since 2006, so a refresher in what to expect in a seller's market and how to be best prepared.
Sellers have the advantage in the market right now, but that advantage can slip away very quickly.
Preparation is the key to maintaining the advantage and leveraging that advantage to the highest possible sales price. A home is never hotter than when it first hits the market and a "Back on the Market" home always raises questions. People want to know what went wrong. The first buyer is usually the best buyer, so it is important to keep them in the deal.
Sellers should use a broker that knows the market and understands the competition.
Understanding the market and knowledge of the other houses for sale in the area will allow your broker to price your home correctly. A well-priced home will draw much attention. Lots of showings in the first week should lead to an attractive offer on a well-priced home.
Sellers should disclose everything about their home that they are aware of. A home inspector will most likely find the issues anyway, but it is always better that a seller discloses the issue. If there is a plumbing issue, a roof issue or a permit issue, it should be disclosed. A buyer can figure the issue into their offer, rather than walk away after inspections and out of the house - Back on the Market.
Sellers should have a discussion about offers with their broker before the house hits the market. A process and a strategy should be in place for all offers, including multiple offers. Buyers in multiple offer situations can range from aggressive to jittery.
It is important to not be forced into making a decision too quickly and missing out on a better offer, but that has to be balanced with not losing a jittery buyer worried about the competition. This is why having a process and strategy in place is so important.
Letting buyers know what to expect can keep the aggressive ones at bay and the jittery ones in the game. That is how the best price is achieved.
Buyers also have to be aware of a seller's market and plan appropriately. A buyer has to be ready to act quickly. If a new home that is priced well hits the market on Tuesday, don't expect it to be available on Saturday. Be prepared to make an offer. Have a mortgage pre-approval ready, have an action plan with your broker, and pull the trigger. If you don't, you may miss out on the house of your dreams.
Buyers also need to be prepared for disappointment. In a multi-offer situation, there are losers and only one winner. No matter how prepared a buyer is, sometimes there is a better offer made. Fewer contingencies, cash offer, higher price, and many other reasons can influence a seller to choose another offer. Buyers need to understand that it is part of the process and not become discouraged.
Buyers also should use a broker that understands the market and knows the competition. After losing out in a multi-offer situation, a buyer can become frustrated and over bid for the next house they like. A good broker can tell a buyer if a house is priced right and may attract multiple offers or if it is over priced and won't solicit as much attention. An experienced broker will also help a buyer put together the most attractive offer possible in multi-offer situations.
It is a seller's market in southern Maine, but buyers and sellers that recognize this, use an experienced broker, and plan ahead can come out on top.
Rick is a realtor, real estate author, and long time Windham resident. You can reach Rick with all of you real estate questions and needs at rickyost@KW.com.