What is a "Seller's Market" and are we in one?

What is a "Seller's Market" and are we in one?

If finding your potential new home has been somewhat extra stressful and houses seem few and far between, there is a reason for that... we are currently experiencing a "Sellers' Market in the Northern Suburbs of Cape Town. A "Sellers' Market" is a term that one often hears in real estate. But what is it exactly? Quite simply put, it equates to few properties being available and having many buyers who are all extremely eager to purchase. Now there are benefits for the seller during this period. The benefits for the seller are namely: Potential multiple offers, you will often receive your full asking price, houses tend to sell quicker, and concessions or negotiations may not be needed. This essentially leads to our next question - How do you know if you are ready to sell?

There are 6 tips that you can follow to figure out if you are ready to sell:

1. You have equity on your side.
2. You are out of debt and have cash in the bank.
3. You can afford to buy a home that is better suited to your lifestyle.
4. You are emotionally ready.
5. You understand the current property market.
6. You can cash flow the move.

Although a seller's market is highly beneficial for the seller, there are still 3 strategies that a seller can follow to ensure a smooth process.

1. List your house at the correct price. Just because the market is right does not mean that homes can be listed at any price. If you lift your house too high, buyers will still not want to purchase it and list your house too low.
    
2. Choose the correct offer. The correct offer is not necessarily the highest one. The best or correct offer will be the one that will cause the least number of hassles. These offers usually have proof of finances or already approved bonds or cash offers.
    
3. Have a new home lined up. Due to the market being right for selling, it means that your house will not take too long before it sells. You will therefore need a new home lined up and ready. You can also sell your home on the condition that you get a certain period of time, e.g., 30 days, to find another suitable property.

BUYING A HOME DURING A SELLER'S MARKET

If you are a buyer in a seller's market do not fret. There are strategies that you can follow, to assist you during the buying process. Before you jump in, decide what your wants and your needs are and then determine what your budget is. 4 Strategies will be of assistance to you.

1. Assume there is more than 1 offer. As mentioned, there are few houses on the market, which means there is most definitely someone else who has their eye on your dream home. You will therefore need to decide on a strong upper price limit from the beginning. This will depend on what the house is worth and what you can afford. Remember if you win the bid but are unable to finance it - you have wasted your time and energy.
    
2. Ensure that you have a pre-approved bond. For you to stand out from the crowd during a bidding war is, to have proof that you can afford the offer you are submitting. You can do this if you have a pre-approved bond.
    
3. Act swiftly Buying in a sellers' market is all about speed and being prepared. Should you want to make sure that you can buy your dream home, you will need to ensure that you stay a drift of what is on the market and when new listings are loaded. Because of the current market, there is the possibility that offers are put on homes within minutes of them being listed.
    
4. Keep things as simple as possible. It is of utmost importance that you keep your offer as simple as possible, however, you must not waive any financial or inspection contingencies.

As a buyer in a seller's market, you can pre-empt disappointment by being prepared to pounce when that perfect home makes its appearance.

What can RED do for you to sell your property at the highest price?

As a seller, you would want the selling process to be as smooth and successful as possible. For this to become a reality three things contribute to this success. Firstly, you will need to choose the correct agent for the job. This is the individual who you trust to deliver the most professional service. Secondly having your house priced correctly is of utmost importance. This will essentially play the biggest role in whether your house sells quickly or not. Finally, a sole mandate is also important. A sole mandate ensures peace of mind for you as the seller. The agent you have appointed can use all the resources that he/she has at their disposal to market your house according to your needs. It also ensures that the agent's time and energy are focused on your house and delivering the best service possible to you. When signing a sole mandate, it indicates that both the seller and the agent are determined and committed to getting the job done.