Buyer’s Market vs. Seller’s Market: Home Prep Considerations

Real estate market trends can favor a buyer or seller, based on a few factors, like the available housing inventory. 

And if you’re considering selling your home, ensuring a successful transaction looks a bit different based on the market landscape. If you’re in a seller’s market (one that favors you), you’ll likely have an easier time moving your property at the right price. If you’re in a buyer’s market, the journey to a sale might take longer and require more negotiation. 

Maximize your sale in either market by familiarizing yourself with the nature of both and the best practices for competing in them. Here’s a guide to home prep considerations in a buyer’s market versus a seller’s market.  

What is a buyer’s market? 

A buyer’s market favors home purchasers. The primary market condition is that there are many available homes and not many people looking to buy. So, a prospective buyer has their pick of a property and can more handily negotiate a beneficial sale price and terms because sellers have fewer interested parties.

Buyer’s markets tend to keep home prices low since there is a great deal of competition. Overpriced properties aren’t as attractive as their more economical counterparts. 

What is a seller’s market? 

Seller’s markets favor home sellers, as the primary condition of these housing markets is that there are few properties available for a wide audience of buyers. In a seller’s market, homebuyers must compete for houses—giving sellers more price negotiating power and leverage in general.  

In a seller’s market, housing prices can soar. Sellers may even earn above their asking price thanks to an eager buyer who makes a lucrative offer to beat out competitors. 

How to prep for a buyer’s market

Buyer’s markets can be stressful for sellers, but they aren’t impossible to move a home in, either. Here are a couple of ways you can navigate this unfavorable situation successfully.

Negotiate on closing costs

Typically, sellers are responsible for very few closing costs, like transfer taxes or getting a professional home inspection. They’ve also been responsible for a big chunk (if not all) of agents’ commissions, but times are changing, and home sellers are likely to be liable for less of this closing cost going forward. 

One way you can make your sale more attractive to a buyer is by offering to cover closing costs a seller usually wouldn’t. For example, you can throw a few thousand dollars at the buyer’s costs (which include title insurance and appraisal fees, among others) and/or their moving fees. Or you could offer to pay a higher percentage of the agents’ commissions than you’d initially planned.

Prioritize repairs and renovations

In a buyer’s market, home seekers have many great property options. Make your home stand out by boosting its beauty and functionality before putting it on the market. Get a home inspection to find out if there are any outstanding issues with your property, and make those essential repairs. Go a step further and fix minor problems, like faulty light bulbs or worn siding, making your home feel more livable. 

Then, renovate. Cost versus value reports and your real estate agent can provide solid insights on upgrades that drive buyer interest and high-value sales. For example, updating garage and front doors, refinishing floors, and doing minor bathroom and kitchen renovations can pay off. Use a closing line of credit (CLoC) from Titus to cover repairs and renovations now and pay back when you sell your home. 

Not only will your home look and feel more attractive to buyers, but you’ll also save yourself from taking a hit during price negotiations. In a buyer’s market, this party has more bargaining power and can negotiate a lower sale price due to flaws with the home or push you to make upgrades to seal the deal. 

How to prep for a seller’s market 

In a seller’s market, you have the upper hand. You may be able to sell your home for a higher price and in less pristine conditions than you would in a market favoring buyers. Here are a few tips for leveraging the full potential of these beneficial selling conditions.

Focus on only the most important renovations 

It’s always a good practice to get your home in top shape before putting it on the market so that it looks move-in ready to buyers. Have a home inspection done to uncover major issues, and make essential repairs. Then, declutter, depersonalize, and deep clean. Finally, tackle some high-ROI (return on investment) renovations, like revamping your front door, repainting walls, and boosting curb appeal through tasteful landscaping. 

But consider skipping more involved, costly work, like completely remodeling your kitchen, that might not earn you much more on your home sale or help you sell quickly. Remember that buyers are eager, and you don’t need to woo them with fancy upgrades. Your real estate agent should be able to advise you on what cosmetic updates appeal to the local market (and that don’t imply going over the top).

Understand the market

Yes, a seller’s market benefits you, but if you’re not careful about how you price your home and navigate buyer negotiations around that number, you could lose out. 

Take advice from your realtor on how to price your home. You may be able to earn more than usual, but you don’t want to set a price astronomically higher than the home’s appraisal value, as a lender won’t approve a buyer’s mortgage for a home selling for higher than it’s worth. This said, you don’t want to price too low either, as you won’t take full advantage of this competitive market and the lucrative payday you could earn. 

Then, remain savvy during negotiations. Your real estate agent can offer support and insights. If you have several offers on your property, this might spur a “bidding war.” Your agent may let buyers know there are several interested parties, pushing them to bid as high as possible to win out over the competition. 

Consider your needs

Perhaps you’re eager to move into your next property or make a quick sale for another reason. Or maybe you want to take your time finding your next dream home and not feel rushed into accepting an offer. In a seller’s market, it’s important to consider your timeline and moving arrangements, as offers can start rolling in quickly. And if you have already found a new home, start packing.

If you need more time, counter a potential buyer’s offer by asking to slow the process down (within reason). They may concede in a seller’s market because they’d fear losing out on the deal otherwise. Plus, you likely have other great offers, so you won’t lose out if that buyer rescinds theirs. 

Sell for more in any market by leverging a CLoC

Being in a buyer’s market versus seller’s market shifts your home prep considerations. You may have to focus more heavily on repairs and upgrades in a buyer’s market than you would in a seller’s. But either way, you want to put your property’s best foot forward. 

Fix up your home pre-sale with a closing line of credit (CLoC) from Titus. Use up to $125,000 on repairs, renovations, and even moving and storage fees. Learn how it works here.