The real estate market is a forever-fluctuating market. It experiences highs (seller’s market) and lows (buyer’s market). You may find that you are in need of selling your real estate property. If you are lucky, you will find that you are selling during a seller’s market. However, this is not always the case. Sometimes a real estate investor is forced to list his/her investment property for sale in a buyer’s market.
Selling during a buyer’s market is far from ideal. A buyer’s market is when the housing market is experiencing a low, which will cause more people to invest in real estate properties. Opposite of a seller’s market, an investor can feel out of power and overwhelmed over the though of losing money on his/her investment. An investor selling during a buyer’s market has limited power. Here are nine things that can be controlled by the property seller to make the process as smooth as possible when selling in a buyer’s market.
Find Your Edge
You are in a buyer’s market. Your competition is high. How are you going to sell your real estate property quickly? You will need to find the edge your property has over the rest of the market. A good place to begin is to find all the investment properties that are on sale in your area and discover how your investment property is better than the other investor’s properties. Every investment property can gain an edge over another. Some properties are simpler to find their distinguishing features than others. They maybe be equipped with a poo, or a larger lot. However, your property can have less obvious traits, maybe a larger living room, or fantastic natural light exposure. Whatever the edge is, as a real estate investor you must locate it and exploit it.
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Look at the Competition
It is very difficult to maximize profitability during a buyer’s market. The market will dictate the value of your real estate property. For this reason, you must be able to set a fair price when selling your investment property based on the local housing market. Do some investigating. Find out what similar properties are being valued at.
Get Your Home in Its Best State
Most people do not want to buy an investment property in a poor shape, especially in a buyer’s market. Competition is too high. Buyers that are investing in real estate property during a buyer’s market tend to be more selective. They want to look for the best simply because they can find the best. Thus, it is essential to get your investment property in its best shape. Locate the problems and fix them based on your discretion. It is wise to prioritize these issues based on their profitability.
Offset Price Based on Repairs
The competition is grand, and you want to settle as fast as possible, which means strategic compromises could be made. Like previously mentioned, you must prioritize your repairs based on their profitability. This means that not all fixes are worth the trouble in a buyer’s market. For certain fixes it is easier to offset the price of the repair from the asking value of the property. This is beneficial as it will keep you in negotiations and will make it more likely to finalize a deal quicker.
Sell and Buy Lower
A buyer’s market is deterrence to a seller, but does have its own advantages. You may have sold low, but you are also able to buy low. It is likely that another property will be needed after selling an investment property. For this reason, you are able to take advantage and buy low on your new real estate property.
Related: Do Not Fall for These Pitfalls When Buying an Investment Property
Save on Advertising and Real Estate Agents
Advertising as well as real estate agent commissions can be pricey. This can be an unnecessary spending when selling an investment property. Real estate properties are listed all over the internet. The privilege of selling in a buyer’s market is that buyers are constantly searching for real estate. As long as the property is listed online, investors will find it, thus saving you money on the real estate agent commission and advertising.
Know Your Buyers
Get to know the needs of your buyer. Every property buyer is different and has different demands. For example, a first time homebuyer may not have any appliances. Selling the property with the fridge included could mean the completion of the real estate transaction. Get to know your buyer and try to make the place more intriguing for him/her.
Prepare Yourself Mentally
A buyer’s market is stressful and exhausting for sellers because no one can predict how long the property will be on sale for. Buyers can waste your time making random demands just to retract the deal last second. Although this can be extremely frustrating, it is important to keep the emotion on the shelf. Just remember that nothing is personal, it’s just real estate business.
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Keep Negotiations Open
As long as negotiations are ongoing, there is a higher chance of completing a transaction. A buyer’s market will dictate the value of your investment property. There is no need to play hardball throughout the whole negotiating process. Interest in your investment property is going to be harder to come by. Be flexible throughout the negotiations to keep the negotiations open.
The main objective is to make money when investing in real estate. Selling investment property can be a very profitable transaction depending on the market. In an ideal world a real estate investor will only sell during a seller’s market to receive maximum value from the investment property. However, that is not always the case. While it is true selling in a buyer’s market is tougher, it is not impossible. Following these nine steps will help sell investment properties faster while dealing with a buyer’s market. Here at Mashvisor we realize what it takes to invest in real estate. That is why we share our knowledge to simplify your real estate experience. Come and join us at Mashvisor for all your real estate needs!
