The property market moves in swings and roundabouts. But one thing is always certain... after a seller’s market comes a buyer’s market.
In a buyer’s market, buyers tend to be choosier, properties stay on the market longer and prices stagnate. For sellers, it can be a nerve-wracking, stressful time. But there are ways to make sure you don’t come out selling your home at a loss. Here’s what we recommend.
Understand your competition.
Which properties in your local area are you competing with? More importantly, how can you give yours an upper edge? If your property has something the others don’t, use it as a selling point. Maybe you have a larger plot of land or your property is located in a more sought after street. It’s about finding an angle to make your property stand out.
Look at the comparables.
In a buyer’s market, buyers have the luxury of being finicky about price and setting a fair price is essential. So you need to know what other properties are going for in your area. The best way to do this is to buy a suburb sales report from a research company like RPData or Australian Property Monitors, or look at the property section in your local paper each week and follow the sales results. You can also get these reports free from PropertyNow.
Get your home in its best state.
Everyone knows that a well presented home sells better. This is even more important in a buyer’s market. In a competitive market, buyers are picker about small details like light fixtures and window furnishings, so you need to get your house in its most pristine state. This may take some prioritising by choosing the repairs that will be most profitable for sale.
Sell lower and buy lower.
When you sell your home, you usually have to buy another one. In this case, a buyer’s market can serve you well. You may sell a little lower than you’d hoped for, but if you’re clever you’ll buy at a good price (and pay less stamp duty than you would in a seller’s market). To do this effectively, you need to spend time researching and understanding your local market so you know a good price when you see one.
Save on advertising and agent commissions.
Over 80% of buyers now use the internet as their first point of call for researching property. So you no longer need to spend thousands of dollars getting your property in front of them. If you want to save, ditch the print campaign. Internet advertising is very effective – and far cheaper. And real estate agent commissions are your largest selling cost - they are also your most unnecessary cost. Buyers will find your property so long as it’s listed on the major real estate portals like Domain and realestate.com.au.
Keep your settlement terms flexible.
If you can be flexible on your settlement terms, you won’t restrict your pool of buyers. Some buyers need unusually long or short settlement dates, others need more flexible payment terms – if you can accommodate them, your property will begin to look like a more convenient option.
Know your buyers.
Get to know your buyer’s needs and you may find a trigger point. Maybe they are first homebuyers and lacking furniture or appliances – throw in your fridge. If a buyer is tossing up between two or three properties, they may need a small nudge to swing your way.
Lower the price rather than pay for repairs.
When buyers have the pick of the housing litter, they can get a little demanding about repair works. Rather than organise the repairs yourself, offer a compromise by reducing the sale price to cover the costs. This way, you get to settlement day more quickly and avoid the hassle of dealing with tradies and contractors (and potentially damage greater than what was estimated).
Prepare yourself mentally.
Selling a house in a buyer’s market can be frustrating and stressful. Buyers can waste your time and be picky about the details of your home. At times, you feel powerless and desperate. It’s important you set your emotions aside and try not to take it personally. Sometimes, you just have to accept that the market will predict the sales terms for your home.
Keep negotiations open.
When you’re dealing with a tricky buyer, it’s tempting to put negotiations in the all too hard basket. But the truth is, buyers can be hard to come by in this market. So keep talks going and continue to negotiate until the buyer either buys or walks.
Ever sold your home in a buyer’s market? We’d love to hear your stories. Tell us in the comments what you did differently and how you found the experience.