Simply put, a “buyer’s market” is a term commonly used to describe a market condition where the supply surpasses the demand. The real estate market after the housing bubble burst back in 2007 is a prime example of a buyer’s market. The nation as a whole had suffered through a fairly significant recession over the past several years when home values along with the demand for real estate plummeted. With lower home values and an increase in inventory of homes for sale, a buyer’s market was created. Understanding how to sell your home during these situations is the key to selling a home quickly and at a reasonable price.
With that said, maximizing your home’s resale value when the market favors the buyer typically involves a multi-pronged approach. The following tips on “how to maximize your home resale value in a buyer’s market” can help ensure that your home sells for every penny despite the disadvantages of a buyer’s market.
Choose the Right Home Improvement/Remodeling Projects
Taking on expensive, complicated home improvement projects right before you decide to sell your home is usually not a good idea. First, it is highly likely that you will not be able to recoup all the financial costs of a major home improvement project at the time of sale. On average, a seller can only expect to get 50-75 percent of his or her investment back on a major remodeling project. While there are some projects that have a higher rate of return on investment, it is usually a gamble not worth taking. Moreover, you may deter buyers who don’t like the addition or improvement or who would have preferred to do it themselves in their own style after purchasing the property. Although expensive remodeling is usually not advisable, that is not to say that you should never invest in significant home improvement project. For instance, if there are any structural issues with your home, you should definitely make the necessary repairs before listing it for sale. Also, you should make sure that all major systems in your home (electrical, plumbing, heating and cooling) are in working order.
Stage Your Home to Sell
A fresh coat of paint throughout the home and a professional cleaning of all floors/carpeting are also good ideas. Likewise, trimming bushes and trees and planting flowers outside to give the home curb appeal is advisable. Finally, de-clutter each room to give the home the appearance of having more space and to give the potential buyer a chance to envision themselves living there.
Get the Maximum Appraisal Value for Your Home
Even before homebuyers arrive at your doorstep, you want to make sure that your home is presentable for the appraiser (a state licensed professional who will provide his or her expert opinion about the market value of your home). It is important for sellers to get the maximum value for their home during the appraisal process because this is what your homebuyer’s mortgage lender will likely use to determine how much they will lend.
A way to improve the chances of getting the maximum appraisal value would be to gather as much information about your home as possible. Compile a record of all the past home improvements that you invested in, which may have increased the value of your home (E.g. master bathroom was completely remodeled, countertops have been replaced, etc.), and present this information to your home appraiser for his or her consideration. You can also conduct your own comparative market analysis. You may have information regarding your own neighborhood that your appraiser may not be aware of. For instance, if your neighbor sold his home at a price that is significantly lower than the property’s fair market value only because he had to relocate for a new job, then your appraiser should be made aware of that information.
Reach Out to a Real Estate Professional
The process of selling your home will be a challenge and getting an offer with a price you are happy with is even more difficult – especially in a buyer’s market, and one of the trickiest part of selling a home is the negotiation process as there are many legal terms as well as costs involved. Not only will you be negotiating the sales price for your property, but you will also be negotiating other terms of the agreement, such as who will be paying what closing costs. Working with a seasoned real estate agent gives you a competitive advantage when it comes time to negotiate.
In addition, consulting with a real estate agent will give you a more realistic idea of what your home is actually worth. In a buyer’s market, sellers should expect to get low offers. Many buyers will come with very low offers if they understand that they are operating in a buyer’s market; however, that does not necessarily mean they are unwilling to negotiate. A real estate agent can help you draft a counter-offer and work towards negotiating a higher price for your home.