The Hot Seller’s Market Continues
The market is continuing to be blazing hot for sellers; however, buyers are facing a lot of twists and turns to buy their dream home which is your home when on market. Understanding how the market is “working” for potential buyers can help you position your home for top dollar. Here is my advice for selling for more in a “supernova” 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
- Mortgage interest rates
- The economy and the reopening after COVID
- The future of remote working
The inventories of homes for sale are less than 50% of what was available last year, and that inventory was low compared to 2019 due to the pandemic restrictions. The mortgage interest rates for purchase financing is historically low but has been higher recently than a year ago, but still rates are very, very good. The life after the pandemic is the big unknown for most buyers and sellers. Will remote working change significantly? Will inflation continue to rise? Will the economy return to what it was before the pandemic?
What Buyers Are Facing Buying
Home Buyers are facing:
- Low Inventory
- 20% Higher Home Prices since 2020
- 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 in the background affecting the current buying frenzy of the market.
- More home falling out of contract and back on market
- Price reductions increasing
- Mortgage interest rates
- 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, homes failing to appraise, buyers unable get the loan. 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 volatile 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.
- A home and property in good 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%-10% 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 happen 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 want a nice home 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 celebrate the win buying your home with a home they can move into that has been cared for and with no major issues to address.
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.
The market in our area is seeing appraisal issues for value and most are due to not only the price but the condition of the home the appraiser sees when they inspect 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 words 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 solar leased or owned with help you sell for more.
Sell for More Tip #4 – “Vacant Homes” Sell For More
Buyers really want to move into the home when the escrow closes. Vacant homes are selling for more since there is no rent back to be negotiated or replacement property to be bought by the seller. Simplifying the selling of your home will allow you to sell for more in this market.
Sellers benefit and sell for more money when they sell a vacant home. Seller’s can market an occupied home and sell the property with no rent back or replacement property purchase required. However, pictures of a vacant house works the best in this hot market.
Real estate professionals are seeing the hot market changing because all our lives are changing after the pandemic restrictions were lifted June 15, 2021. However, the dynamics of low home inventory, record home prices, fluctuating interest rates, inflation, and the uncertain future of remote working and living is changing the real estate market in subtle ways. 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.