6 Things Every Seller Should Know in this Market
The real estate market has been red hot for more than a year, pushing prices up in most neighborhoods. The high prices come with pros and cons, though. While it feels like a great time to sell a house, more than 80% of young Americans (18 to 34 years old) say that now is the wrong time to buy.
You might wonder, "How can I sell my home when no one wants to buy in this real estate market?" That's a terrific question. Luckily, a little preparation can go a long way in making the process easier and helping you get as much as possible for your property.
1. The market is hot
As you know, the real estate market is hot right now because supply has not kept up with demand. To some extent, the short supply comes from the high price of construction materials. Developers don't want to build single-family homes when essential materials like lumber cost so much.
The problem might not be as recent as it seems, though. About 12.3 million households were formed in the U.S. between January 2012 and June 2021. During that same period, only 7 million homes were built. The short supply has finally caught up as young people plan to start families and purchase their first homes. What's important for sellers to recognize is that the U.S. has about 5 million fewer houses than it needs to meet demand. That makes your residential real estate very valuable.
2. The cost of home improvements
Do you plan to invest in some home improvements before putting your house on the market? Make sure you set aside plenty of time and money. Supply chain disruptions have forced contractors and construction companies to charge higher prices and work at slower paces. Many of them would love to get more work accomplished. Unfortunately, it's hard for them to source some of the materials they need to keep up with client requests.
Talk to contractors now so you can get realistic price and time estimates. If you don't already have a contractor, talk to your realtor to get recommendations. An experienced real estate professional will know which renovations companies are more likely to accommodate your preferred schedule.
3. Increasing interest rates
Many economists believe that the Federal Reserve will need to increase interest rates soon to combat inflation. We are starting to see signs of this increase across the nation. Keep this in mind when negotiating a sales contract with buyers. The higher the interest rates go, the less "buying power" they might have to be able to purchase your property.
4. Paying two mortgages
"Can I sell my home at a high price?" Probably, but it might take a little time to get the price you desire.
Higher real estate prices mean that you can get more money when you sell your home. The real estate market isn't quite as hot as it was last year, though, so don't expect your home to sell the same day you list it. That might happen, but it depends on several factors, including your location and price expectations.
The higher prices also mean that you will probably spend more on your next home. If your current property doesn't sell quickly, you might need to pay two mortgages for a few months.
You will likely make your money back when you sell your house. Still, you should plan for a short-term financial hardship.
5. Be ready to buy
Not everyone finds a new house before selling their current one. Other homeowners experience the opposite problem: the hot real estate market makes it easy for them to sell, but they need to find short-term housing while they search for a new house they love. You can make some of your money back when you need to cover two mortgages for a few months. You don't get that benefit when you pay for short-term housing.
Work with a real estate agent so you can find a home you love as quickly as possible. You don't want to rush into a decision. Choosing a wonderful new home becomes a lot easier, though, when you have a knowledgeable realtor on your side.
6. Selecting a listing agent
So you're thinking of listing your home for sale. Great! How do you go about choosing a listing agent for your home sale? Lucky for you, we just published an entire blog and VIDEO on this topic. Click here to read the blog, or watch the video linked below.