My "Aha Moment" to Get the Most From a Seller's Market this Season
The Denver real estate market is alive and well, with buyers scrambling to find homes. As a homeowner, it may seem like an easy sell, but that last thing you want to do is rush to the market only to find out later that you could have gotten far more money for your home if you had only done a few things differently. Wondering where to start? Here's your "aha moment" that will make a huge difference in how much money you walk away with.
Understanding The Denver Real Estate Market
The Denver real estate market right now would be described as a "seller's market," which is fantastic news for any homeowner. This means that the market is set to work to a seller's advantage because there are far more buyers than homes for sale. At first thought, homeowners often assume that being in a seller's market, their home will be a quick and easy sale. Put up a nice listing, set the price, and let the bidding begin, right? Wrong!
While buyers may not have many options, the buyers who are entering the Denver market are choosy. They may have sold their own home, and they're looking for something more suitable, or they've been renting in the area for some time, and they're ready to get into a home of their own. In any case, the worst mistake a Denver homeowner could make right now is pushing their home to market before they've done their homework.
In order to get the most money for your home, you need to:
- Look at the average days on market (DOM) in your neighborhood. This lets you know how quickly you can expect your home to move.
- Choose the right time to list your home. Spring and summer are ideal, early fall is feasible, but mid-winter makes things tougher. Act sooner rather than later.
- Set the right price, don't assume you can get way more than your home is worth simply because there aren't many homes for sale. Consider comparable homes in your area to set the right price.
- Understand the costs associated with selling your home beyond closing costs, and consider how much money you're set to walk away with if your home sells for its list price.
- Depending on your timeline and budget, consider investing in minor renovations—even new light fixtures or blinds—to improve the appearance of your home.
Once you can cross these things off the list, you're ready to have your "aha moment," so let's dive into the secret advice you've been waiting to hear.
The #1 Negotiation Tip to Help You Get More
Once you know how long other homes in the area average on the market and how much money they're being listed for, you have a good starting point for listing your home. If you're lucky, though, you'll be able to sell for more than your list price. The beauty of a seller's market is that you'll end up with multiple bids, often above the asking price, which is why you should think twice before over-pricing your home, as that will only turn buyers away.
So, assuming that you price your house correctly and the offers begin rolling in, that's when the opportunity arises to get top dollar for your home. It all comes down to your negotiation skills. Here's your tip: Don't choose the highest offer.
More often than not, sellers lay all the offers they have out on the table, and their eyes go straight to the highest dollar amount, but real estate transactions aren't so cut-and-dry. During negotiation, you need to consider these fundamental aspects:
- Financing Contingency: If a buyer makes their offer "contingent on financing," that gives them the right to back out of the deal entirely if they can't qualify for a mortgage. If you accept this offer, you may very well waste time and end up having to re-list your home.
- Home Sale Contingency: An offer with a home sale contingency means the buyer can back out if their home doesn't sell before they purchase yours. This implies they need the funds from their home's sale in order to finance the purchase, and it also means that, if you accept their offer, you'll be crossing your fingers that their house moves quickly.
- Inspection Contingency: Whenever a buyer adds "contingent on inspection" to their offer, it basically gives them an easy way out. If the inspection comes back with anything, even a suggestion that the caulking around the kitchen sink needs repair, the buyer can use that information to try and negotiate repairs, reduce the price, or back out altogether if their concessions aren't met.
Should you turn down any offer with these contingencies? Absolutely not, but buyers and their agents know how to use these contingencies to their advantage, so you must be aware of them. Don't get blinded by a high bid—look to its contingencies and fine print before you accept because you could very well end up re-listing if you pick an offer with many outs.