How to Sell your Home in a Buyer's Market
1. Price, Price, Price
2. 2-3 Showings a week
3. List Directly with a Broker
4. Educated and Experienced Broker
5. Responsiveness
6. Major Discount on Commissions
If you have landed on this page, you are probably a seller attempting to understand this new type of buyer’s market.
The fact that you took your research time and understood that it needs its own type of attention, you are on the right path. Acting as if this is the high seller’s market of 2021, will likely not yield productive results.
I have made a video explaining my points on How to Sell your Home in a Buyer’s Market. However, I will go into further explanation in this specialized page.
What will NOT work in this Buyer’s Market of 2022-2023:
1. Convincing a Buyer into buying your home
The salesmanship of a property is not going to work for one main reason. Buyer’s are now buying what they can afford, which means they are settling instead of choosing their next home. The higher interest rate of 6%-8% will be a big difference in their overall monthly payment (PITIA). This means they are paying per month much more than years in the past. Therefore, selling them into a home will be almost impossible. The buyer first has to afford your home, then see if it is a good fit for them.
2. Open Houses
Open Houses didn’t statically work for the seller when it was a seller’s market anyways. Those who visit open houses usually are not pre-qualified, and are not financially ready to buy a home. They are merely getting their bearings on what to do to buy a home. They probably google: “what does it take to qualify for home ownership.” This type of persons won’t be your buyers that can place a valid offer tomorrow. And these type of buyers will definitely not help you on a seller’s market.
Open Houses can be a dangerous strategy which can open you to vandalism. It is definitely something to consider in this high inflation era.
3. Hiring your friend, cousin, or any other family member as an Agent
Agents usually belong to a 5% or 6% total commission brokerage. These brokerages don’t just make their revenue from commissions, but also from selling training and merchandise to their agents. This will only be more costly to both you as the seller, and your agent. Especially if they have little experience, which may be less than 10 listings a year.
Now, let’s look at what WILL work on selling your home in such a tough market:
1. Price, Price, Price
This is not just proper economics but common sense. If your property is located in a major metro area, there will always be a market for homes. However, the difference is at what price point. But how do you realize what that price is for the buyer’s market?
2. Two to Three Showings a week
During my listings, the same statistic seems to work for obtaining offers. Two to three showings a week is a good indicator that your price is matching the current market price. This is a KPI (key performance indicator) that 3 people spent their gas and their agent’s time to come see your home. Enough showings, they become offers. Those offers become contracts, which turn into a closing. The showings are the very first step to selling your home. But if you aren’t getting any showings, then you reduce and calibrate your price until you get them at that rate.
3. List Directly with a Broker
List with a Broker, and not an Agent. This way you can also receive some of the savings if that Broker offers it from dealing with them directly.
4. Educated and Experienced Broker
In my personal case, I am a PhD, MBA, and 2L at Law School who happens to be running a Real Estate Startup with a business model designed for these specific buyer’s market times. My startup rose from buyer’s market times of the 2010’s, and it thrived from its savings. I picked up my ideas from academia, and have since closed well over 600 properties. Most of them without any help of an Agent, directly dealing with the seller.
5. Responsiveness
My Brokerage is equipped with coordinators that handle the phone lines and emails. This type of responsiveness is needed to keep your listing’s competitive edge.
6. Major Discount on Commissions
My Real Estate Startup keeps the commissions of the seller at 3% total or even less depending on the listing price. Do not fall under the roos of other companies stating that they are at 1% or 2%. They are just marketing their commission, not including the buyer’s agents. This means that 1% or 2% does not include the 3% to the buyer’s agents for a total of 5% or 4%. We are total 3%, where we only keep the minimal of .5%, where the 2.5% would go to the buyer’s agents. Numbers matter on this buyer’s market, call us if you need further explanations.
I hope I have been able to provide you with the value necessary to close your home in this buyer’s market. Some of you are looking to sell your home because of an immediate need to downsize, or even move to another more affordable state. I hope this reading has saved you thousands, which would make it a savvy choice in such a tough market.