A seller's Real Estate market occurs when there are too many buyers and not enough homes for sale. During a seller's market the supply is less than the demand, which causes an increase in for sale prices. Denver, Colorado is currently experiencing a seller's market in many of its neighborhoods, as well as the surrounding metro area. To help you capitalize on the recent seller's market, we have gathered together seven homeowner oriented tips for our current market.
Denver's Seller's Market Is Good News For Homeowners
According to the Colorado Association of Realtors Denver is currently experiencing a housing boom. In fact, the over abundance of buyers has caused supply levels to dip to lower than average levels with only a one month supply of unsold homes remaining on the market. While buyers interested in the most sought-after neighborhoods are likely to enter into bidding wars, savvy Real Estate investors are turning to up and coming neighborhoods. Whether you own a property in the most affluent sections of Denver or have already claimed an investment property in one of the rising neighborhoods, the following seven tips can help you to capitalize on the current seller's market.
- Price your home correctly. -- One of the benefits of a seller's market, is that you can price your home above the established market. However, before you begin to dream of pricing your home at 15 or 30 percent above the market, make sure that you have effectively weighed the pros and cons of your chosen pricing strategy. Homes that are priced too far above the market will sit empty without enough offers. A home that sits for too long on the MLS can make buyers wary during the seller's market. With this in mind, consider pricing your home at 5 to 10 percent above the market. In this way your home is likely to sell quickly, and if you are forced to accept an offer that is below your listing price, then you are still likely to receive a higher than market closing price.
- No need for additional buyer incentives. -- In a buyer's market you can occasionally forgo the need for additional buyer incentives. This strategy holds true for in-demand neighborhoods, where buyers are scrambling to find a for sale property. If you do offer a buyer incentive, make sure that you have built in a "kick-out" or other "safety" clause, so that you have the right to continue to market your home.
- Make sure that you know your agent's commission split. -- During a seller's market you might be tempted to negotiate for a lower Realtor commission. If you choose to use this strategy, keep in mind that your selling agent will be forced to offer a lower split to the buyers' agents. If the buyer agents doesn't like the split, then they are less likely to favorably present your home to their respective buyers. While negotiating a lower seller commission can help you to further capitalize on the seller's market, it might mean that your home will take a longer time to sell or a lower sales price.
- Know when to put a stop to a buyer bidding war. -- A seller's market can encourage buyer bidding wars, which can be great for your ROI. However, it is crucial that you and your agent know when to put a stop to a bidding war. If a buyer feels too pressured, then he or she might simply walk away from the bidding war in favor of a property with a lower price tag in a comparable neighborhood.
- Put your home on the market at the right time. -- According to a 2016 Realtor.com® study, more than 85 percent of buyers who plan on purchasing a home in 2016 will do so in the spring or summer months. With this knowledge in mind, and the spring months upon us, make sure that you put your home on the market at the right time. Don't wait until the market is at its hottest during the summer months; instead, you can capitalize on the seller's market during the spring and early summer timeframe.
- Determine if your home has competition from the new construction market. -- Real Estate professionals have shown that the new-home construction industry is expected to continue its upward surge. In fact, it is predicted that there will be a 16 percent increase in new home sales as compared on a year-over-year basis. When pricing and marketing your home, be sure to consider the impact of any new-home construction(s) in the surrounding area.
- Capitalize on rising home prices with good marketing tactics. -- In its recent study, Realtor.com® noted that nationwide home prices are expected to increase by 3 percent year-over-year. The rising home prices will further inflate the seller's market, which will in turn create additional competition amongst for sale properties. Make sure that your home is listed using good marketing tactics, including: a personalized listing, an eloquent MLS listing, professionally staged photographs, in-print advertisements, and online marketing efforts that including social media campaigns.
The Bottom Line: A Seller's Market Can Be A Real Estate Investors Dream Come True Whether you are a first time homeowner or a seasoned Real Estate investor, a seller's market just might be your dream come true. The above seven tips can help you to capitalize on the current Denver Real Estate market, while simultaneously providing you with a list of insider tips that might help you to purchase a new residential investment property within an up and coming neighborhood.
To learn more about the Denver Real Estate market, or to start your journey towards buying or selling a Denver home, please contact us anytime.