So the market is changing and you went from being able to ask for whatever you wanted for your home to having to consider PRICE REDUCTIONS??!! What Gives! Right?
You’re not alone. In the past 8 quarters we have seen record price appreciation in the housing market across the country. Now that reign might be coming to an end, but does that mean recession, and how do I sell my home faster?
To the first question, no, we are not headed for a recession like the ones we are used to. This situation would best be described as a market correction. When you have rapid appreciation + inflation, it’s the Fed’s job to put the brakes on that and we are seeing a correction in the market accounting for the increased interest rates. A market correction is far more complex than this simple answer but for now let’s leave this issue there, and move to 4 tips on How to Sell Your Home in a Shifting Market - Faster!
Tip 1: Interview and Hire a Great Agent
Despite what you may think about agents, a great agent is an invaluable tool to get your home sold for the most amount of money. According to the NAR (National Association of Realtors), Last year 92% of home buyers and Sellers used Agents. Why?:
- It’s their sole job to know the market better than anyone else. Most home owners feel they might be giving up too much money to have agents run their transaction, but the reality is that homes without an agent are sold at 85.68% of the value of what it would be if there had been an agent representing the seller- and they sell in less time.
- They have the marketing tools and vendors to get your home sold faster
- There is a monetary incentive for them to sell your home for more money than anyone else in less time-
- It’s their job to protect you, negotiate on your behalf, understand the in’s and outs of Real Estate contracts and what happens if a buyer does “x” and how they can protect you as the seller.
So, interview and then hire a great agent. The first agent you interview may not be the right fit, might not have the best knowledge, or might be a part-time realtor. You want someone who is doing at least 10 transactions in the past year, has been doing it for longer than a year, is in real estate full-time and can not only negotiate well but communicate effectively. Most agents are terrible at communicating and you should take your time in finding out whether they are a good fit for you and are able to address all of your needs. Just because an agent has a big team does not guarantee they will pay attention to your home, likewise just because an agent might be operating solo does not mean they are less experienced or not as capable as those big teams. Most times, solo agents or small teams offer the best customer service and can offer undivided attention.
Tip 2: Minimalize, Depersonalize, Neutralize
Minimalize
- Before photos and showings, declutter your home and remove likely 85% of all your items in the home. This may sound extreme, but as we nest in our homes we accumulate and tend to have more items out and about than necessary. With a cluttered home, new buyers will feel less attached to your home and potentially feel overwhelmed by the clutter of many personal items.
Depersonalize
- As much as you love that very special collection of porcelain dancing frogs or antiques in your home, new home buyers want to be able to see themselves in your home and at the end of the day it’s hard to visualize a space being yours when there are a bunch of other people’s personal items crowding your view. Simply put your personal photos, trophies, and memorabilia away for the time-being.
Neutralize
- If you have really strong bold colors in your home, it would be best to re-paint your home before showing. Bold colors usually turn buyers off, as most homes are viewed in online photos and when buyers see bold colors it may be hard for them to see past the work of re-painting. Buyers these days mostly want a move-in ready home and it’s hard for buyers to make it their own style when one of the largest things getting in their way is painting the house.
These 3 tips are some of the most important to selling your home for the most amount of money in the shortest period of time.
Tip 3: Your home is worth what a buyer is willing to pay.
This one offends most people but hear me out. In a free market (which we currently operate in) products/goods are worth what someone is willing to pay for that product. Priced too high, no one will buy it. Priced too low, more people will offer more money than you’re asking since they feel your product is worth more than you’re asking for it, and priced just right you will have a buyer that will pay the price you are asking within an average time frame.
Price is not what your neighbor’s house sold for, it’s not what you owe on the property, it’s not what the market appreciation might say it is. The intrinsic value in your home is what someone is willing to pay for it. Period.
This is why if you are out of alignment with the market and you price too high, people will let you know the price point is too much or there is not enough value to justify the asking price. If you price it just below that market price, you might get several offers all bidding on your home to a point, which may exceed the market price. At the market price a buyer in an average time frame for your market would be willing to pay for it. The factors are plentiful regarding what goes into price. It’s not just $./sft, it’s also layout, upgrades in the past year, the age of the main systems in the home, location, lot, quality and condition of your home, and more.
This brings me back to point 1. If you are trusting your financial advisor to take care of your wealth, if you are trusting a banker with your money instead of keeping it in a shoe box, if you are trusting a lender with your mortgage, it makes sense to trust a RELIABLE and experienced agent with your home’s value. In most cases we are dealing with half a million or a million + dollars– which is where most Americans keep their net worth and their generational wealth. A good agent will see themselves as part financial advisor for your property. They are in the industry every day dealing with market conditions and will know how to price your home appropriately for the market. This might mean more than what you expected or less than what you wanted, but it all comes down finally to my last tip-
Tip 4: Know your goals
If you know your goals then it puts the pricing question into context. IF you need to sell quickly and get out of the house for any reason- a move, foreclosure, divorce, death in the family, following a passion of yours, etc- you might need to list lower than market value to drive enough people into the home to increase the number of potential offers you would get on your home.
If you are looking to upgrade but don’t need to rush out of your home and you could take up to 3 months to sell your home, you might want to be patient and see what the market says. If the average days on market is 45 days, you’re at Day 30 and you’ve had some consistent showings, you can wait to have the price reduction conversation. But if you're at Day 45 and your market average is 15 days on market, there is a disconnect and you might need to change your pricing to come back into alignment with what the market is willing to pay. If you have all the time in the world and want to ask for the most money for your home, or are unwilling to go lower knowing that your home will sit for months (in the luxury market this can sometimes be as long as 6 months to a year), then just know that you are asking for the highest priced home, are waiting for the market to catch up to the price you are asking or that right buyer that agrees with you on your asking price.
All are valid strategies but if you want to get your home sold faster, talk to agent, minimalize, depersonalize, and neutralize. Know the market price of your home, know your goals and keep checking in with them. That way you are always moving in alignment with your goals and you can have confidence in them.
If this info was helpful, you can download our Seller Tips Infographic here for quick reminders of these tips anytime.
