Seller competition is an all too common occurrence. It’s not just in real estate, surely you’ve seen your fair share of different companies competing with one another to dominate the market. For example, Apple and Samsung have been in a tech war over their smartphone specs, pricing, and consumer demand. Also, there’s a tough competition between McDonald’s and Burger King. They’ve been competing for the title “the best burger in the world.”
That’s the typical scenario. But what would happen when it’s the other way around? In this article, we break down the fundamentals of buyer competition, and it is good news for sellers in the market.
The Concept of Competition
In economics, competition in the market is an indicator of a healthy economy. Both consumers and producers can influence competition. It’s not always the producers who compete. Sometimes, consumers can induce competition among producers to yield a positive benefit to them.
In Michael Porter’s Five Forces Model, competition is one factor that affects the profitability of an industry. In times of intense competition, producers are aggressive in cutting prices, while consumers enjoy lower prices. Moreover, producers are willing to develop newer products and services to get ahead of competitors.
In the end, competition benefits the consumers ultimately. In the same vein, intense competition among consumers can also mean that sellers have a field day in the market.
More Buyers Than Sellers
In the previous section, you’ve learned how competition works in a normal setup. However, the game rules change when there are too many buyers (consumers) than sellers (producers). Today, this phenomenon is happening in the real estate market in Orlando. In case you’re not aware, many Americans are moving to Orlando daily.
Most of them are families who are looking to settle down. Unfortunately, here’s the big problem. There’s a small inventory of houses for sale. Homeowners aren’t just willing to sell right now due to the uncertainties brought by the pandemic. If you’re a seller, and you’re reading this article, today’s your lucky day.
With more and more home buyers than home sellers, pressure is being placed on buyers. Under normal circumstances, buyers would want lower prices. However, due to the high demand for houses in Orlando, buyers aren’t looking at the price anymore. They’re more motivated to find a home rather than bargain for a lower price.
Hence, if you’re planning to sell your house, now’s the best time. You’ll never run out of inquiries because many people are looking for a property to own in Orlando.
Higher Profits for Sellers
With aggressive buyers not looking into lower prices anymore, you will have a higher profit than normal market conditions. Here’s what will happen if you sell under normal market conditions. First, the demand is near equilibrium with the supply. Hence, buyers will be particular about the price point since the supply of houses is abundant. In other words, they’ll look for the best price point.
Second, negotiating is hard. If you place your house for sale at a high price, buyers will skip your offer and look for others. In effect, you’ll be forced to lower your cost. However, reducing it doesn’t result in a quicker sale.
Enhanced Supplier Power
Normally, costs related to the acquisition of properties (e.g., taxes, permits, fees, etc.) are shouldered by the seller. In some cases, buyers want sellers to pay for these costs since it’s an inconvenience on the buyer’s part. However, that’s in normal market conditions. Right now, you have enhanced power over buyers who want to close a sale. Hence, you can woo the buyers to shoulder these costs without them even complaining.
Want to know how to sell your home at its full asking price. Read our article to know the secrets.
The Nickley Group Can Help You Navigate Steep Buyer Competition
Just because buyer competition is on the rise doesn’t mean you have to give up on being a homeowner this year. At the end of the day, all you need is a trusted real estate expert to help you avoid pitfalls in a seller’s market and come out on top.
With over 50 years of combined experience, The Nickley Group is the leading real estate agency in Orlando. Our expert team is always on hand to cater to your real estate needs in Florida. Call us now at 407.906.2456 to discuss your property buying or selling needs. You can also drop by our office at 1013 E. Colonial Dr. Orlando, FL 32803. We look forward to working with you.