Drivers of High Demand
It’s generally a good idea to take advantage of pent-up demand, because that’s what drives competition. Having a larger number of people who are looking to buy a home should increase the odds that you’ll make more money on the sale. In some seller’s markets, the number of homes for sale might be few and far between. If there is not much to choose from, the nicest homes will attract the most attention, but the ugly homes will sell, too—simply because there aren’t very many options. Another driver of high demand can be low interest rates on mortgages. In 2020, which was overshadowed by the COVID-19 pandemic, interest rates dropped to historic lows. A report by Genworth, a mortgage insurance provider, found that the number of first-time homebuyers increased by 14% over the year before.
Ways to Attract Multiple Offers in a Seller’s Market
Some people may think that all you have to do is stick a sign in the yard and let the market take care of the rest. It might be easier to sell in a seller’s market, but it takes a lot more to sell a home than hanging a sign out in front. It requires a strategy.
Prepare the Home for Sale
Preparing your home for sale may or may not involve home staging, but it absolutely includes cleaning it from top to bottom. Buyers will overlook small defects in a seller’s market, because there are not enough homes to choose from. Your home will sell sooner with new carpeting if the existing carpeting is worn—but generally, bad carpeting will not stop an interested buyer in a seller’s market. However, you may want to limit carpeting to the bedroom areas and consider a hardwood look elsewhere.
Go on the Market on Friday
Friday is generally the best day of the week for home selling. One good strategy is to set listings to “go live” on Thursday night at midnight so buyers will discover them among the new listings when they get up on Friday morning. Be sure all photos are color-corrected and perfected to make the online presentation sizzle. Don’t forget to upload a virtual tour if the home lends itself to one, and release digital ads to Facebook and other websites.
Limit Showings
People tend to want what they think they can’t have. Don’t allow tours of your home at all hours of the day—restrict the hours and the days. That will force some buyers to tour when other buyers are also present, which can spark a competitive nature.
Lower the Sales Price
If you set the price just a hair under market value, this will attract more buyers. It also will leave some wiggle room for buyers to begin bidding over the asking price. It isn’t necessary, but it is a strategy that works well in some markets.
Do Not Set a Time for Offer Presentation
If you let buyers know that you will review all offers on a certain day at a certain time, you will lose some buyers. Buyers do not want to wait around to find out whether their offers will be accepted. There is also a large pool of buyers who will say they do not want to be involved in multiple offers. By the time they find out, it’s too late—they’re already involved somewhere else.
Review Seller’s Market Offers
After all of the offers are received, make notes on each one so you can easily compare them. Don’t look only at the price offered, but other factors as well, such as:
The amount of the earnest money deposit Whether the offer is all cash—or if financed, the proposed type of financing Amount of down payment Waiver of standard buyer inspections or contingencies Seller costs, including possible proposal to pay the buyer’s closing costs Unusual requests or allowances
Some buyers will try the strategy of playing to your emotions as the seller: sending photographs of themselves, often including their children or pets. They may write you a letter, telling you about why they want to buy the home and sharing some personal information.
Accepting an Offer
After you’ve had a chance to digest this information, you have a few options as the seller. You can:
Accept the offer you like the best Issue a counteroffer to one buyer or more than one buyer Ask all buyers to resubmit their highest and best offers Adjust the sales price, and look for more offers
Usually, a seller can find an acceptable offer among the initial ones made. It is not always the highest one, but if it is financed, it is the offer that the seller believes is sufficient to meet the buyer’s lender’s appraised value. If the home does not appraise at the price offered, it generally doesn’t matter how much more the buyer offered. Financing won’t cover it, and not every buyer is willing to bridge a shortfall in an appraisal and pay a lot more than market value.
