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Our top tips to buy and sell in a seller’s market

April 1, 2021 10:00 am by Upside

The property market is complex - and trying to time it to make the right move when you’re buying or selling a property can be even more complicated.

The real estate market is often fluctuating in favour of buyers or sellers, depending on wider economic, political and unexpected global issues much like the global pandemic we just experienced.

The Australian property market currently finds itself in the midst of a property boom - the likes of which we haven’t seen for quite some time - with house prices rising at the fastest rate in 17 years. This unprecedented seller’s market is off the back of record high levels of buyer demand as consumer confidence returns to the post-pandemic market, in addition to historic low interest rates and continued record low levels of properties on the market.

But for those who have found that they have outgrown their homes during the mandated time spent at home over the quarantine period, or for upsizers, downsizers, or any growing families who are working from home and need to move into a property that can suit their new needs, the rapidly rising property prices and fierce competition for houses is making it harder to buy and sell in the same market, leaving many frozen with what they should do.

Homeowners find themselves faced with tough questions such as: Do I sell first, and run the risk of not finding a home before settlement or of further price rises? Do I buy first, and hope I can sell my existing property quickly for a good price?

The ideal scenario of timing your property transactions as close as possible is not always possible, but if you have spoken to an agent and taken the right steps to be prepared, you can be successful in any market. Here are our top tips to navigate the current hot seller’s market - as a buyer AND as a seller!

What is a seller’s market?

A seller’s market is a real estate term that describes a market where demand exceeds supply, or in other words where there are more real estate buyers than sellers. Simply put, there are not enough properties on the market for all the interested buyers!

This often leads to multiple buyers interested in a single property, meaning it is not uncommon for properties to sell above their list price in a seller’s market as buyers compete for the hottest commodities.

RELATED: Buyer’s market vs. seller’s market: Know the difference

The signs of a seller's market:

  • Homes are selling for high prices - even in ‘original condition’
  • Sale prices are selling above listing prices - in some cases, far above listing price
  • The percentage of successful sales and auction clearance rates are higher than normal
  • General economy is on the rise
  • The number of properties on the market is low compared to previous months or years
  • Low and falling days on market
  • Sellers don’t offer incentives or discounts

How to buy in a seller’s market

  • Get pre-approved: Getting a mortgage pre-approval puts you ahead of the competition. If a home seller is choosing between multiple offers, they’re more likely to choose a buyer who has been pre-approved for financing
  • Put down your best, strong offer first: Rather than offering below asking price and expecting a counteroffer, start with your strongest offer to distinguish yourself from the pack. This is where market research becomes crucial - you need to know what you should be paying for the property based on market data.
  • Don’t request extras: The fewer requests and conditions to the sale, the better (but you can still make your offer contingent on your satisfaction with inspections)
  • Consider offering a larger deposit, or give the seller a few extra days to move out after settlement

Avoid these common mistakes buyers make when buying property in a seller’s market

  • Over-analysing the price: In the same way that impulse-buying a home is a no-no, over-analysing and taking too long in this market is also ill-advised. Avoid running the risk of losing your dream home by getting prepared with finances and market knowledge so you can move quickly and give yourself more leverage.
  • Be mentally prepared for a bidding war: Often commonplace in a seller’s market, be sure to set your dream house search below your max budget to leave room in case of an over-asking bidding war. Set your maximum limit and don’t blow your budget.
  • Be ready to make your best offer: It is instilled in us to get the best value for as little as possible. When it comes to real estate, most of us naturally want to offer lower than asking price as a strategy, which could work in a buyer’s market where there is a lot of available inventory. Trying to get a lowball deal in a seller’s market may not be the best tactic!
  • Not proving you are a pre-approved buyer: You may know that you will get approved for a mortgage based on your income and great credit score - but the seller doesn’t know that! Getting pre-approved from a reputable lender is paramount to present yourself as a serious buyer

How to sell in a seller’s market...when you’re also a buyer

You may be keen to sell while it’s a hot seller’s market, but find yourself worried that you won’t be able to buy a property in the same market you’re selling in. Here are our tips to navigate this:

  • Make the most of the current market: Make sure you work with an experienced real estate agent who knows the local market and can help you create a strategy to achieve outstanding results while understanding your circumstances. Together, you should figure out what similar homes in your area are selling for to gauge your selling price
  • Buy some time: Discuss with your agent whether the option to delay settlement on the sale of your property could be an approach you can take - this could mean instead of the 30 days settlement, you make it 60 or 90 so you have adequate time to find another property before the sale goes through. You can also look into making the transaction subject to sale of the other property of the other property in the special terms and conditions.
  • Prepare your home for sale to get on the market as soon as you’re ready: If you’re hesitant in listing your home before you’re able to buy, our advice is to prepare your home for sale so it’s ready to hit the market as soon as you’re ready to go. This means:
    • Choosing the experienced agent to help you sell your home when you’re ready
      • Preparing a strong marketing campaign to reach as many buyers as possible (signboards, advertising on real estate portals such as realestate.com.au, Domain, All homes, agents database, letterbox drops, print, and any other options your agents can suggest)
    • Preparing your house for a sale and touching up anything that needs to be fixed before a first open home, as well as for listing photography

At Upside, our experienced local agents help you get ready for a sale so you don’t have to think about a thing. Our exclusive online platform means everything is prepared for you to approve, and you can go live on the market with just a click of a button!

In this seller’s market, it pays to be prepared ahead of the pack. Get in touch with your local Upside agent now by booking a free, no-obligation appraisal.

Upside

Upside is an Australian-owned, full-service real estate agency with local real estate agents, low fixed fees and zero commission. Our standard is other agents’ ‘extras’, delivering vendors a complete agent managed service including a full appraisal, open home management, copywriting, photography, signage and advertising. It's the way real estate should be.

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