Whoever says I welcome change. Most of us do not like change, and if you have been a Seller for the last decade you are not going to love this change. Sellers’ beliefs must change because The Real Estate Market is changing. Anyone in the Selling or Buying market does not panic. The real estate market is not going to take a complete nose dive with rising interest rates, but gone are the days you make an obscene profit selling your homes. You will still make a profit, but the profit margin will not be as high. Here are some Seller’s beliefs that are changing.
1) I can price my home as high as I want, and I will still get the obscene number and have my choice of which offer I accept
False unless your home is super unique and it has to be Over the top unique. However seller you will still see a profit when you sell because inventory is still low, but your profit margin will be lower than in past years. Most Markets will see a 10%-15% decrease in sales price over the next 18 months. Realtor.com reported that 1-5 sellers had to cut their list price. So the most important advice is to be flexible and listen to what the market is telling you. Keep in mind that even if you don’t sell for the price you initially asked for, you’re likely walking away with a substantial amount of equity in your pocket because homeowners are sitting on a record-high level of equity.
2) No Need to make repairs I can sell my home in “as-is” Condition
When the market was a seller’s market which it has been for some time, especially during the pandemic. Sellers could list their home as is and have a line out the door of folks wanting to look at the home and put an offer on it, but the market has changed. Home inspections are back and buyers are facing higher interest rates so they want homes where there is as little money as they have to spend to make repairs. Realtor.com reported In a seller’s survey, 67% of homeowners who sold in August negotiated with buyers who wanted repairs done (in comparison with 31% in the previous six to 12 months). If you want a swift, smooth sale, fix things before you list.
3) There is still a lack of inventory so I do not need to offer Concessions to a buyer.
False, Yes some markets’ inventory is still low, but it costs buyers more money to buy a home. During the pandemic, mortgage rates were at rock bottom. Recently, mortgage rates reached 7% first time in 14 years. How does this affect a seller?
Well, to begin with, these high rates are precipitating a cooler housing market since many homebuyers are unable to qualify for mortgages at the same level they were previously. With higher interest rates, many buyers in our market qualify for $100,000 less than they would have with previous rates.
What should a seller do if their listing on market is starting to look a bit stale? They can do a few things
1) reduce the price
2) Pay some or all of the buyers closing cost
3) Buy down the buyer’s interest rates for a certain amount of years
4) Your Home will sell fast
Your home might sell quickly but might not sell quickly. When I used to look at listings I would always see offers are due to buy X day and time and never mind the fact I always hated seeing it because it can harm a buyer and the deadline could backfire and scare all buyers away. There was a time we saw that in listings on market, but we are no longer in the thick of the pandemic and the market is resetting back to where a home takes longer to sell which means more days on market. Realtor.com found the average home is on market for 50 days which is seven days long. Buyers on market today are Savvy and sellers need to keep that in mind when they list their homes on market.
5) Home Staging isn’t necessary
I always say a little staging goes a long way. A home that looks lived in always sells better than an empty one. Studies say a staged home sells 88% faster than a home not staged and typically gets 20% higher offers when a home is staged. If your home was on market and you pulled it and put it back on market staged if it’s done right buyers might not realize the home was on market before. So when you list for sale please look into getting the home staged, and staging doesn’t need to break the bank.
6) It Doesn’t matter when you put your home on the market
It used to be in many markets put your home on the market anytime and it will sell. I can’t say in Boston Metro Market I have seen homes hit the market in late November or December, but in others, there was a time you could list your home for sale any month, and the buyer would come. You might find it now and then, but the norm is shifting to a Spring and Summer Market. The more traditional market is returning, and that also means if a home is on the market in fall or winter, buyers might get better deals but will likely have fewer options
If you are thinking about Selling or buying in 2022 or Spring 2023, let’s talk, and look at your local market and see what the best options are for you.