First of all, what is a soft market? A term commonly used by economists, a soft market is when there are more potential sellers than buyers in a certain industry. The phrase soft market can be applied to a specific commodity, like textiles or lumber, or to an industry as a whole, such as real estate.
A soft market is also known as a buyer’s market, since it can lead to fast drops in price as sellers compete to gain the attention of the limited number of buyers. Clearly this situation can be unfavorable for sellers, as they must keep lowering their asking price just to get glanced at by a buyer. Buyers have the advantage as they can ask for concessions, make hard bargains, and even dictate the terms of the deal.
The position of real estate in the United States is currently in this soft market situation. While the general economy is slowly improving, the housing market has been slowed by winter weather and reduced affordability overall. Sales of new houses are expected to keep increasing even while construction of new homes has hit a soft patch.
However, what if you’re trying to sell your existing home? Unfortunately, the sales pace for already existing homes remains low. As of March, existing home sales have fallen 14 percent in total, the lowest they’ve ever been since the summer of 2012.
As the market could soften further or take a long time to recover, there is a lot of advice given to sellers about what to do during a soft housing market. This advice includes:
- confiding in professional advice or a full-service brokerage
- having an appraisal done so you have a realistic selling price
- having your home pre-inspected before listing it
- pricing it correctly for the market situation in your area
- and cleaning and staging your house to make a good first impression to buyers
A seller can also incentivize their house by catering to the buyer’s needs. This includes staying flexible on price, offering cash to cover improvements the buyer wants (such as landscaping and painting), proposing a home warranty plan on large appliances or plumbing and electrical systems, and picking up expenses like pool cleaning or summer lawn care.
While panicking and dropping your property in soft market is of course not a wise idea, successfully selling your home can take tons of time, invested money, and concessions.
If you are in tight situation, such as needing to sell your house quickly due to a job transfer, divorce, threat of foreclosure, or other emergencies, the standard soft market advice may take too long or be too costly. Your options are much more limited, and include short sales, deed-in-lieu, defaulting, or just gifting your house away to someone else. Naturally, these choices have their drawbacks and could take just as long depending on where you live.
For those of you who need help and time is of the essence, professional real estate companies such as Elite House Buyer can save you the hassle of selling in a soft market by buying your house outright at a reasonable price.