Is it a good time to sell my house? That’s a question I hear a lot. You may be anxious having lots of people through your home due to COVID, or concerned that if you sell you’ll have nowhere to go. Both valid concerns, but sooner or later, you will reach a point where you need to consider: “Is this the time to sell?”

What constitutes a “good time to sell”? That depends. More than anything, it depends on the your needs and motivation. If you have too much home, or not enough home, if you have taken a new job, or some other significant change in your life: all of these can make selling your home more urgent. If you are thinking about cashing out your equity to help with your retirement, move to a place with lower taxes, better weather, closer to friends and family, those too are valid reasons to sell, but may have a more flexible timeline. The fact is, whether the market is good, or bad, is generally less important than other reasons in your life to sell a home.

After all, in most cases, if you are selling you will also be buying, so what you lose on one transaction you can make up on the other. Or you might consider selling and renting somewhere to wait out a change in the market more favorable to buyers. As with the stock market, trying to time the real estate market is no easy thing, and you are as likely to get it wrong as right, so the best approach is to let your other needs drive the timing of your sale, not the market.

Market Conditions

As of winter 2022, we are still very much in a seller’s market. Well priced properties are still attracting multiple offers. There is still a healthy supply of buyers motivated by low interest rates and pent up demand from chronic under-building of new homes, and the lack of existing home inventory for the reasons stated above.

Could the market change? To some extent it already has. While well priced homes still attract multiple offers, the market is much more price sensitive than it was a year ago. More homes are dropping prices, and buyers are getting pickier. And interest rates are expected to rise about 1 point over the coming year, which will add to price pressure. But demand is likely to remain strong for the foreseeable future. Only a drastic rise in interest rates (which no one is predicting at the moment) or a significant, sustained increase in housing supply will dampen demand.

Next Steps

So what if it is a good time for you to sell? What are your next steps? Start by taking a fresh look at your home? Is it in good shape? Do all the systems work? Buyers today have limited resources in time, money or contacts to take on a major project. Homes that sell quickly and for top dollar are up-to-date, clean and fresh. Address any repair issues up front, paint and refresh kitchens and baths with simple updates like new appliances, and de-clutter as much as possible. Don’t overlook lighting, brightening dark rooms is one of the least expensive, but most effective updates you can make. Your real estate agent can help you identify those items that will have the greatest return on your investment.

If you are ready to sell, give me a call, or text at 973-462-4079. I am prepared to help you find a buyer for your home, and set you up for a smooth transaction. I can also help you find a new home in the area, or a great agent in the area you are transferring to. Even if you are just exploring the possibility of selling, I’m ready to help!

I was recently asked about pricing a house, “Isn’t it better to set the price 10 or 20 thousand dollars over the market to leave room to negotiate?”  Setting aside the question of whether this was ever a good idea, in today’s sellers market, it turns out this is actually a really bad idea!

Markets and buyers’ habits have changed over the past decade. Much of the “old wisdom” about pricing, marketing and negotiations run headlong into a drastically changed world.  For starters, 20 or even 10 years ago, buyers entered the market with much less information available to them.  They were totally dependent on an agent for market data, and few of them truly understood what data was available.  Today, with the Internet, mobile apps and portal sites, buyers are more savvy about market conditions than ever before. This alone, would be reason not to price your home above market value.  But the current lack of inventory, which has resulted in a strong sellers’ market, means that well-priced homes will go for asking price, at a minimum.  Buyers, understanding that they may well face a bidding war, are no longer looking at homes at the top of their budget, understanding that those houses will quickly rise out of their budget range when the bids start pouring in. This means that the most qualified buyers for your home won’t even look at the house if it’s priced above their real budget.  But those who will look at your house are expecting more than your home likely offers, since they are expecting it to offer the same qualities and amenities that a home at that price and higher offer.  These house hunters will be disappointed in your house from the outset and quickly move on to better-priced options.

As an example, let’s say the market value of your house was $550,000.  The most qualified buyer for your house, one who is willing and able to spend $550K for it has most likely capped their search at $525K in order to account for multiple offers and bidding wars. Meanwhile, if you are listing your house at $570K, your qualified buyer will consider it far to expensive to consider, while those who do come looking at it will be expecting to see a home worth $570-600K and be very disappointed in what they see. No matter how often you beg for viewers to “bring all offers”, in current market conditions buyers are conditioned to think of listing price as a floor, not a ceiling for offers!

So what about the tactic of “testing the market” at a higher price, then lowering it when no offers come in?  This, too, has fallen victim to the glut of market data now available to the average buyer.  Today it is relatively easy for buyers to see how long a house has been on the market, and even if it was taken off the market for a time and put back on at a lower price. In today’s markets, buyers make one of two assumptions about such properties: there’s something wrong with the house, or the seller is difficult to negotiate with.  In either case, buyers are reluctant to step in for these properties.

The answer, then, to the age old question of “how much negotiating room should I build into the price” is quite simply: None. Pricing the house to market is essential in getting it in front of the most qualified buyers for the property. If you want to be somewhat aggressive, in fact, pricing the house just slightly below market value can be effective in sparking just the sort of bidding war that drives the selling price well above asking.  This strategy works when the house is truly desirable, in location, condition and terms. To get the most from your house, look first to the condition of the house and property. Make all necessary repairs, spiff up the place with fresh paint, updated lighting and hardware, consider adding Smart Home features like the Nest Thermostat or August lock, and de-clutter and consider professional staging.  These will have far more impact on the sale price of your home than any pricing or negotiating strategy.  Click here for a free report on cost effective ways of increasing the value of your home!

If you would like some advice on how you might price your home to compete in today’s market, please contact me, I’ll be happy to come do an evaluation and show how I can help you market and sell your home for the best price to enable you to pursue your dreams, wherever they take you!