Sellers Should Take Advantage of a Sellers' Market
Basically speaking, a sellers' market is when there are more buyers than there are sellers and a buyer's market is when there are more sellers than there are buyers.
In a sellers' market, the prices tend to go up, because the buyers have fewer homes from which to choose, so in order for any buyer's offer to be accepted among several offers that a seller receives, the buyer raises the price, which makes that buyer's offer more favorable to the seller.
In a buyer's market, the prices tend to go down, because the sellers have fewer buyers who may wish to choose their home, so sellers lower the price of their homes to entice more buyers to make offers.
Although there are other factors involved, this is the basis of the theory of supply and demand.
So the question is posed as to how can a seller take advantage of a sellers' market. Does simply putting their home on the market in a seller's market allow for them to get the best offer?
There are times when the sellers of homes, in a seller's market, accept an offer within 1 to 2 days of the home being put on the market, but there other times where they accept an offer after 5 to 7 days of the home being on the market.
Why is there a difference in how long the house has been on the market before an offer is accepted?
Of course, there could be numerous answers to this question such as the location of the house, the condition of the house, and the asking price, to state a few.
However, for homes which are extremely similar, there can still be a difference in the number of days on the market. Why?
Some of it may have to do with marketing, but when there are a limited number of houses on the market, the serious buyers are ready to pounce on homes as soon as they come on the market.
For a particular house, a reasonable offer may be one that offers full price, with a FHA loan, a request for 3.0% closing help, and a contingency for a home inspection. If this offer comes in on day one, then why not accept it?
If the seller waits an extra day, then perhaps they will get a similar deal except with conventional financing, or another deal with no inspection contingency, or a deal that is cash, or a deal that raises the price.
There is a limit as to how long a seller can reasonably hold an offer without giving the buyer a response so it may be unfair to hold that first offer from day one for a week while waiting for a better deal.
To offset this concern, if a listing is put on the market on Monday, then the seller's agent could state in the listing that all offers will be reviewed on Saturday. Even though buyers may notice a listing as soon as it comes on the market, whether it is a sellers' market or not, it may be impossible based on a work or a personal schedule to see the house on day one, so by not reviewing offers until the end of the week, the seller allows for more, and possibly better offers to be submitted. This, also, creates a sense of urgency and a feeling that this might actually be a fast moving property.
If the seller accepts offer number one and does not give interested buyers a reasonable chance to see the property, then, although, the seller may be receiving an acceptable and reasonable offer, it may not be the best that could be achieved in a sellers' market.