What is a Seller’s Market in Real Estate?
A Seller’s Market is when low supply and high demand create conditions favorable for people selling. In real estate, this phenomenon often drives up housing prices whereby many properties sell in multiple offers over the asking price.
Montreal has been in a Seller’s Market since 2018 with low supply. In 2020, various factors resulting from the pandemic, including lowered interest rates and working from home, have made it an even stronger Seller’s Market.
A Seller’s Market can be an ideal time for a homeowner to take advantage of the circumstances, given that there is less competition. Some think it is easy and hassle-free to sell during a low inventory market, however there are several strategies needed in order to be successful.
How to get Top Dollar for your Home in a Seller’s Market
Clean the home from top to bottom, declutter and depersonalize. Remove family photos and minimize personal belongings as much as possible. This is the first step to packing. It may also be a good idea to get staging advice to set up your home. If the home is vacant, many realtors will offer virtual staging services whereby furniture is electronically inputted into the photos.
If you have lived in your home for a very long time, it may be a good idea to do a pre-sale inspection. The advantages of this are to make any necessary repairs and eliminate surprises that can put the buyer in a position to renegotiate or back out of the offer.
Make sure you choose a realtor who will pull out all the bells and whistles to provide maximum visibility for your property in order to reach the largest pool of buyers possible. This includes extensive advertising, use of social media, professional photography, floor plans, virtual tours, and more. A globally recognized real estate brand can get international exposure, extending the reach to even more buyers.
PriceThe most important factor is to price your home accordingly. If you overprice, your property could sit on the market and ultimately sell for less than it should. In a Seller’s Market, if a home doesn’t sell in the first week or two, buyers start to wonder what is wrong with it, and it may become a “burnt listing” after a few months. You will want to review the recent market statistics and relevant comparables, in order to set the right price. Consider the sold comparables as well as the active comparables (i.e. the competition). If you price higher than your competitors, you may help them sell faster.
VisitsList the home on a Wednesday to give the market time to see it before offers are considered. Set up a visit schedule, such as between 12 pm-2 pm on Friday, Saturday, and Sunday.
OffersHold off on receiving offers until Monday evening. This gives time to have as many buyers as possible visit your home and prepare themselves so that they do not make a hasty emotional decision and try to back out later when you have lost your momentum. When reviewing offers, consider not only the price but also the closing date, conditions, and whether or not the buyer is pre-approved. Keep in mind that if a buyer bids beyond market value and is taking a mortgage, the bank may send an appraiser to correct the price. Once the offer is accepted, your realtor will walk you through the process to ensure you are protected and that everything goes smoothly.