It’s a buyer’s market! Quick, get a home for a great price before things change! Such has been the mantra of the media and also real estate agents (can you believe it?) for the last two years.
First things first. The classic definition of a buyer’s market in general is usually the following:
Now, though it is not very often that the Dallas area will fit this textbook definition of a buyer’s market, it is usually always the case that there are more sellers in Dallas than buyers at any one time. At present, supply far outpaces the demand on a regional scale resulting in the collective negotiating power remaining in the hands of the fewer buyers in our beloved metroplex. With that said, I’m going to tell you that you can have people react to your home as if it is a seller’s market regardless of the economic landscape and bigger picture numbers and that YOU can be in control.
If you don’t understand that’s ok as I kind of wrote the article that way to get you to this point. Depending on where you price your home, you can place yourself in 1 of 3 scenarios.
Scenario 1: You price your home higher relative to other comparable homes in your neighborhood with the expectation of negotiating downward a little to come to an agreement to make sure “no money is left on the table”. In doing this, this seller has made other more appropriately priced homes appear more attractive than theirs and has thus entered the buyer’s market side of negotiating.
Scenario 2: In this scenario, you have priced your home appropriate to the other comparable homes in your neighborhood. With a larger supply of homes on the market there is less of a compelling reason to make an offer on your home. This puts the power in the hands of the buyer once again everything else being equal.
Scenario 3: You price your home below market value. In this example, you’re home now has become the most desirable to comparable homes like yours. Now, guess what happens? Now the buyer is motivated to make an offer today as your home might not be around tomorrow. Often, these buyers understanding where the home is priced in relation to market value will bid the home up to its market value.
I’ve helped many clients secure foreclosures or standard listings that had entered into the competitive bid process by knowing what a home’s true worth was. If a listing is priced under market value, offering 5% below list will probably get you a “thanks for playing, good luck in your future search” response.
A buyer will be left out to dry if they do not have a fundamental understanding of where each home is priced in relationship to others in each neighborhood. Just because it is a buyer’s market historically for many properties in the Dallas area at any given time, that doesn’t mean that you can’t profit from either side of the transaction. Choose an agent who understands this and will work for your best interests. You will be delighted with the outcome.
Sincerely,
Ryan Kirkpatrick
