It’s no secret the real estate market is blazing hot right now. The COVID-19 pandemic has brought on many economic challenges. One has been keeping up with the demand for housing.
As people change their jobs, work more and more from home and move outside of major metro areas, there’s a strong need for housing. But inventory is not keeping pace, especially over the past year.
High demand, low inventory
According to Redfin, which tracks home prices and inventory across the country, the number of new listings hitting the market has been shrinking since August 2020 and has continued each month since. However, demand is not slowing down, causing house prices to skyrocket.
The median house sale price across the United States was $390,000 in February 2020, up from $290,000 two years prior. And depending on where you live, these numbers are even more dramatic. For example, in Los Angeles, the median house price is $837,000, up from $635,000 in February 2020. There are similar stories in other major US cities, such as Seattle, Boston and Washington.
Are high prices good news for sellers?
All these numbers suggest it’s a great time to sell a house. But they can also lead to lots of stress. You might be asking yourself: Is now the right time to sell? What if prices keep going up?
The reality is that house prices are pretty much always going up. Year-over-year growth has been about 5% between March 1992 and December 2021. If you sell your house now, it will almost certainly be worth more next year and the year after.
This is just part of why real estate is such a great investment, especially long-term.
Plus, there’s no guarantee housing prices will continue to rise the way they have. Some feel we’re in a bubble, while others say this trend represents a major shift in the US housing market. Either way, inventory is bound to catch up, helping curb demand and bring prices back to Earth.
So, the decision to sell shouldn’t just be about money. Instead, take a more holistic approach. Where are you in your life? How much did you pay for the house? What do your other investments look like? Can you continue to maintain the house?
These questions should help you get a better idea of the right time to sell.
How to navigate the home selling process
Are you getting ready to sell your house? While everyone handles this process differently, here are some ways to help you navigate it to be as stress-free and painless as possible.
Start by hiring a real estate agent
If you’re going to sell your home, you should hire a real estate agent. Look for someone local who has experience selling homes similar to yours, and don’t be afraid to ask friends and family members if they have someone to recommend.
This should be your first move because the agent can help you handle all of the home selling process and can provide expert advice. It’s their job to help you get the best possible price for your home, and they have an incentive because they can make more money in the sale. They can help make important decisions to help you sell your home as quickly and easily as possible and maximize its value.
Do some shopping when searching for real estate agents. Ask for their commission rates and inquire about how they would go about marketing your home. There will be competition for your listing in such a booming housing market. Use this to your advantage to try and get the best agent at the best price.
Research your market
Once you have a real estate agent, start researching your market. Look for sale prices of homes in your area and similar properties to help give you an idea of what you can ask.
Far too many people base their asking price on what they think the house is worth, but this is misguided. There’s so much competition in today’s market that you’re better off looking at what people are willing to pay.
Another thing you should do as part of your research is consider your prospective buyers. Who do you think will be your ideal buyer? A family looking for their first home, vacationers or short-term rental agents?
You will get an idea of how to market and some guidance toward a more competitive asking price, contingency requirements and get an idea of the number of buyers in the market who may be able to put hard money down on the purchase. Of course, your real estate agent can help with this, but the more informed you are, the better. This makes it easier to work together and allows you to push your agent to try new things that could positively impact the price.
If you’re looking to get into or are active in real estate wholesaling you will also want to check if it’s legal in your state. California, for example, allows real estate wholesaling but there are certain requirements. to meet.
Figure out what you want to fix (if anything)
An outdated belief is that you should spend money fixing your house before putting it on the market. Kitchen remodels can significantly impact what you can ask for, and replacing siding or roofing can boost your property’s curb appeal and drive up the value of your home.
However, when it comes to repairs and remodels, the reality is you should try to do as little as possible. Many buyers want to remodel once they take ownership. Spending a lot of money to redesign parts of your home based on what you think people want might not even be worth it in the end.
Obvious structural issues should be taken care of, but other than that, you can probably get away with some fresh coats of paint and some cleaning.
Plus, with the market as competitive as it is, buyers are much less picky than in the past, so you can do less (save money) and probably still command a strong asking price.
Hire professional stagers
First impressions are a huge aspect of the home selling process. While buyers are certainly interested in the specs of a home, they will ultimately decide based on how they feel when they see and visit your property. If it feels like a place where they could live, they are much more likely to make an offer.
To help achieve this effect, you may want to hire professional stagers. These companies will set up your home in a way that is appealing to buyers and showcases its features.
Many people are tempted to do this on their own, but when they do, they set up the home the way they want, which isn’t always what buyers want. A staging company knows what works and doesn’t and can make this part of the process much easier.
The same applies to the photos you use on your listing: Hire a professional. The way you showcase your home online plays a significant role in a person’s decision to come to your open house or schedule a showing. Unless you’re a photographer, it’s best to turn this over to someone who knows what they are doing.
Set a low-end limit
Once offers start coming in, things can get overwhelming quickly. It’s important to have a bit of a plan.
As a seller, this means choosing a number that is the absolute minimum you would accept from an offer. This can be helpful because it helps avoid making overly emotional decisions.
For example, if your home isn’t selling as quickly as you might like (not typical in today’s red-hot market but still possible), you may be tempted to drop the asking price or accept an offer lower than what you wanted. It may at times make sense to do this, but you also don’t want to miss out on chunks of money just because you’re in a hurry.
Knowing how low you’re willing to go before starting the home selling process will keep you from rushing into something you might regret down the road.
Be patient and persistent
In a similar vein, it’s important to practice patience throughout the home selling process. Once you get started, it’s tempting to want it to be over and done with as soon as possible. But if you rush through and accept an offer that doesn’t make sense, you’re just going to regret it down the line.
Your real estate agent may be helpful here as they tend to have a more objective view of the entire process. But if you can learn to be patient and persistent, the whole experience may be more enjoyable and, ultimately, profitable.