Selling your home in a buyer's market may bring traumatic flashbacks of a high school dance: No matter how much you pretty up, you may find yourself sitting alone on the gym bleachers, largely ignored. Don't take it personally—when there are more sellers than buyers, you’re in a buyer’s market—it's less prevalent in today's go-go housing market, but still the norm in some areas.
Last week, we offered advice on how buyers can survive a seller's market, but sometimes sellers in a buyer's market can use some help, too. Look no further than these tips to stand out even amid some stiff competition.
Offer to cover closing costs
Buyers in these markets may hold more of the cards, but that doesn't mean they've got tons of cash. So if your buyer doesn’t have financial wiggle room to pay the full amount you were hoping for, here's a smart compromise: Rather than slashing your price, offer to pay for some of their closing costs instead. Or, paying for moving costs may also motivate a cash-strapped buyer into closing day.
Why does this work? Because you're offering a huge chunk of money upfront. A lower home price, on the other hand, offers buyers dribs and drabs of money over the course of their 30-year home loan.
Buyer's market or not, the allure of upfront money is hard to beat.
“Negotiating $5,000 off the price will only reduce the buyer’s mortgage payment about $25 a month,” says Kyle Alfriend of the Alfriend Group in Dublin, OH. “However, $5,000 toward closing or moving costs will save them $5,000 in cash right now.”
Figure out who’s behind the offer
Every buyer, even in a buyer's market, has particular quirks and weaknesses, and it would behoove you to know—and exploit—them. Through your Realtor®, find out a little bit about the interested buyer. If she's a first-time buyer, consider throwing in stuff that new homeowners need such as a fridge and other major appliances.
“For some buyers, the extras will engage them more than a price reduction. Learn what you can about the buyers and appeal to their likely interests or needs,” says Glenn Phillips, broker and owner of Lake Homes Realty in Birmingham, AL. You can also expect to throw in some other items as well. Window treatments, home warranties, carpets, lawn equipment, grills—anything is fair game if the buyer is interested.
It’s also possible a buyer is interested in something more than just money. Some say some buyers might be motivated to close before school starts—if that’s the case, negotiate to get them settled in before the school buses start running.
Consider paying for repairs
When buyers have their pick of the housing litter, they may demand that you make a whole slew of repairs. If you want the sale badly, go right ahead and agree—but it’s better to “pay” for those repairs by reducing your home’s price rather than doing the repairs yourself.
“If the seller is willing to pay for updates, it is better to outline these, with estimates, and lower your home price and have the buyer deal with the contractor after the sale,” says Phillips. That way, you can get to closing day faster (which the buyer will like, too) and not have to deal with the contractor—especially if the estimate turned out to be too low.
Let them stay the night
Buyers in a buyer’s market may move more slowly because they can afford to be nitpicky; maybe they have some nagging misgivings about the house or the neighborhood. If that’s the case, step up. Alfriend suggests taking a vacation and having them stay in the house and to “use Airbnb to keep it all safe and legal.” If the buyers are worried about the neighborhood’s demographics but you’re not, Alfriend suggests throwing a block party and inviting the buyers.
Slash the price
Let's face it: In a buyer's market, you'd better have an attractive price. Did you overshoot? Reduce your price strategically for a fresh set of eyeballs. While it might feel less painful to lower the listing in small increments, you’re better off just taking a chunk out of the price all at once to catch people's attention.
“A price reduction from $315,000 to $309,000 does little to nothing for engaging buyers. However, reducing a home from $315,000 to $299,000 will mean the listing now appears in online searches by buyers looking for homes under $300,000,” Phillips says.
It may seem like you’re taking a big hit, but a home that sells faster can save you a bit of money, including for “costs such as insurance, repairs, upkeep, utilities, and lawn care. The price of the home is only one variable in the cost of selling, or failing to sell,” Phillips says.
Don’t be too quick to walk
When you’re dealing with a possible buyer, do your best to keep the negotiations going. In this market, you “should only walk away from deals that are clearly awful, super-lowball deals,” Phillips says. Keeping talks open means a better chance of sealing a deal, so “continue to negotiate with the buyer either buys or walks,” according to Phillips.