The Hot Seller’s Market Continues But…
Updated: April 25, 2022
The market is continuing to be blazing hot for sellers; however, interest rates and higher prices to buy are changing the dynamics of selling your home in a hot market. Understanding how the market is “working” for potential buyers can help you position your home for more money. Here is my advice for selling for more in a changing possibly cooling hot market for sellers.
What’s Driving Prices for Real Estate?
There are four factors in my opinion that are driving the real estate market:
- Low inventory
- Better homes for the money if relocating for value
- Inflation. Real estate is a hedge investment
- Lifestyle. This is a great area to live in.
The inventories of homes for sale are still low and there seems to be no “bubble” to cure the lack of inventory. Although mortgage interest rates for purchase financing has been higher recently than a year ago, but the rates are still very, very good. The biggest threat to the hot housing market is the economy, and whether inflation will continue to rise or level out during the year.
What Buyers Are Facing Buying
Home Buyers are facing:
- Low Inventory
- 20% Higher Home Prices since 2021
- Auction Style Selling
- The offer is due by a certain date
- Highest and best pricing
- Buying a home “AS-IS” with no repairs made by the seller
- Seller’s remaining in the home after the sale
Market Issues For Selling Right Now
It certainly seems most sellers will get more money than ever selling their home in this market after talking to an agent. However, the homes on market and in contract are seeing a few issues affecting the current buying frenzy of the market.
- Buyers are not buying “anything.” Condition matters now.
- Mortgage interest rates impacting “multiple offers.”
- More home falling out of contract and back on market.
- Price reductions increasing.
- Sellers can’t buy a home either.
Record prices and bidding wars with unfavorable terms to buyers are causing a lot of issues for buyers to be committed to the sale. I’m seeing 25% of homes back on market due to a host of issues: inspection issues, buyers unable to get the loan, just uncomfortable completing the sale. Sellers are also overpricing their homes on market and missing the “golden weekend” for multiple offers and not getting the best offer or terms they would have received for selling. Mortgage interest rates are rising reflecting the inflation fears of the financial markets. Sellers are finding the replacement home is not easy to buy too. This continues to be a story of the low inventory because most sellers “would sell if they could find a home.”
So, what are the tips and best advice for home sellers to sell for more?
What Makes Buyers Offer More?
The data for closed sales shows ideally what do the buyers want in order to make an offer for more. What are the key criteria that brings offers for more money from Buyers??
- A competitively priced home for multiple offers.
- A home and property in “better” condition.
- No seller occupancy after close of escrow: rent backs, finding replacement property or extended move outs.
Seller Tip #1 – Price your home for multiple offers.
Long story short. Homes are selling for 5%+ over the list price when a home receives multiple offers. Pricing at the last home sale that sold $50,000 over asking with 10 offers isn’t a strategy that wins more money selling. There are a lot of other factors that contributed to the sales price of that “crazy” sales price you saw online. What really happened was this. The price attracted the most buyers. The home and property features, amenities, updates, remodeling and terms of sale brought the best and highest offer to the seller. Buyers today know the market and are price savvy. An overpriced home isn’t seeing multiple offers and the lack of demand for your home will result in less favorable sales price or terms to sell your home.
Sell for More Tip #2 – Move In Ready Homes Sell For More
All buyers especially in a changing market want a nice home that is ready to move into. Buyers are paying way more than they ever thought they would for their dream home. At a minimum buyers would like to buying a home that has been well cared for and with no major issues to address after sale.
Sellers almost always see more money and return on investment for new carpet and fresh paint, as well as making sure everything is in working order in the home.
If you won’t buy the home you live in because it does look well cared for, most buyers will feel the same way after touring your home. Well cared properties always sell for more and in this market, they sell for a lot more.
Sell For More Tip #3 – Property Updates and Features Sell For More
If your house is over 15 years old, updates will bring much needed value and more money when you sell. Newer HVAC, roof, updated appliances, remodeled bathroom, kitchen are all important items buyers look for in a listing.
Also updates and improvements to the property matter too for selling for more money. Buyers are looking for larger yards with landscaping, a pool or room for one, additional parking for RVs/storage, outdoor kitchens, fire pits, covered patios.
If you currently own a home in an area that is served by Pacific Gas and Electric a home with with solar owned or leased or owned with help you sell for more.
Sell for More Tip #4 – Move Out When You Sell
Buyers really want to move into the home when the escrow closes. Marketing that the home is vacant or no rentaback or replacement property contigency goes a long way to helping you sell for more money.
Pro Tip: If you plan on selling a vacant home, take pictures of it staged or with furniture.
Real estate professionals are seeing the hot market changing because of higher interest rates, inflation, and record high home prices. Listing agents are seeing subtle changes which mostly has to do with condition matters now in this market. Updated, well maintained, pride of ownership homes are selling for top dollar. Hot markets don’t last forever and can change quickly. However, I encourage you to follow the advice to sell for more in this article since the advice will add more to the bottom-line when you do sell today or in the next month.
If I can help you in selling your home, please don’t hesitate to contact me or message me.