It’s a New Year. Now what? Yes, the new year is typically a time for hope and renewal and for those who are looking to sell – and simultaneously buy – a home, it can represent a fresh start. But this year, political and social realities are giving some would-be home sellers pause.
Thankfully, the real estate market continues to show real strength, with many housing experts projecting home sales prices and inventory to rise, replacing doubts with consumer confidence.
“Housing prices rose nationally by around 6% in 2016, but the expected increase in ranges from 3% to 5%,” said 24/7 Wall St. “With inventory of existing homes at historic lows and a rise in interest rates thanks to the Federal Reserve, housing inventory for 2017 is almost certain to rise. For prospective sellers that means that if you were planning to sell your home this year, it’s time to get cracking.”
If you’re thinking about selling this year, these tips will help.
Sales have been swift in many parts of the country for several years now. That can make sellers who don’t get offers on day one feel antsy. Despite some ultra-competitive markets where multiple offers and offer-asking-price sales skew the national numbers, across the country, the average days on market of a home for sale is 50.
Price it right
You may be tempted to price your home at the top of the market – or set a new top if you’re in an especially desirable area and if inventory is low. But overpriced homes don’t sell, which is probably why your real estate agent is recommending a lower listing price.
If you’re insistent about your price, don’t be surprised if you get zero bites or the nibbles you do get are far below what you’re asking. Your agent’s pricing strategy will be based on market conditions and designed to get you the most money in the least amount of time. What it won’t be based on: What you owe on the home, what you think it’s worth based on your own estimation, or what you need to get out of it to buy your dream home.
Don’t be afraid to loan shop
If you’re selling your home to buy another, like most people, you might be concerned about rising mortgage rates. Rates are still near historic lows despite The Fed raising interest rates at the end of 2016 and indicating that further increases are in store for this year.
“Because the mortgage rate makes a big difference in how much you’ll pay for your home, it makes financial sense to shop around for the lowest rate you can qualify for,” said Investopedia. But many people don’t look beyond the first offer. According to a mortgage borrowers survey, “Almost half of borrowers seriously consider only a single lender or broker before deciding where to apply,” and “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal,” said the Consumer Financial Protection Bureau.
Asking your real estate agent for a few different trusted referrals could make a big difference. “Getting an interest rate of 4.0% instead of 4.5% translates into approximately $60 savings per month,” they said. “Over the first five years, you would save about $3,500 in mortgage payments. In addition, the lower interest rate means that you’d pay off an additional $1,400 in principal in the first five years, even while making lower payments.”
Make sure your home is clean and lean
It’s more important than ever to make sure your home is as close to perfect as possible before you put it on the market. Unless your agent is planning to market the home as a “project,” it needs to be spotless. You’d be surprised how much better your home can look just by applying some simple staging secrets.
Listen to your agent’s advice
Staging may only be the beginning of what your home requires to get it sold, and your agent’s advice will be critical to getting it where it needs to be. “Sure, you no doubt know more about your home than anyone else. But your real estate agent knows more about how to sell it,” said Realtor.com. “And your agent may make some suggestions you might not like to hear. It’s tempting to take offense or just ignore this advice, but if you do, you could risk seeing your house sit on the market and grow stale.”
Be careful of over improvements
Getting your home in great shape may mean making some improvements, updates, and upgrades. But be careful not to go too far.
“Dying to install new kitchen cabinets or re tile your master bath? Home sellers often assume any upgrades they make to their home will pay them back in full once they sell, but that’s rarely the case,” said Realtor.com. “On average you will recoup just about 64% of the money you spend on renovations once you sell—and certain improvements can actually work against you if they’re unusual or undesirable in your market.