As the local real estate market corrects – notice that I said “corrects” and not “crashes” – now more than ever you need to work with an expert agent when listing or buying a home.
First off, let’s address the market “correction”. Many people fear that the market is crashing like it did back in 2008. Nothing could be further from the truth. The market crashed then because of loose lending practices and today lending is as tight as ever. What is happening now is the market is actually correcting from the crazy seller’s market that we’ve been in for the last few years. That type of market was unsustainable. As interest rates hit rock bottom, demand for housing outpaced available properties causing prices to skyrocket and competition for homes to become fierce. Now we are correcting back to a more balanced market and prices and days on the market are adjusting to reflect that. The rising interest rates are also pushing some buyers out of the market, but we may still see a lack of inventory given that many sellers (move-up ones in particular) are not going to list their home, if they have a very low interest rate, and look for something bigger which they would have to finance at a much higher interest rate.
So in order to navigate this market as a buyer, but particularly as a seller, you really need a experienced listing agent to guide you through how to prepare your home to sell, what price to list your home for, and what to expect when you do get an offer.
As the market was correcting this summer, I had two sellers prepping each of their homes for sale. While I gave both of them similar advice and suggestions, one of them followed everything that I said, but the other did not. And this is the story of what happened to those two homes this summer. Let’s call the home where the sellers followed my advice Home A and the one where the sellers did not Home Z.
For Home A, I told the sellers to declutter the home, do a deep clean, and make sure that the flower beds were weeded and the grass nicely cut before photo day. We talked about removing knickknacks and clearing off kitchen and bathroom counters. I also told them to fix anything that they knew was currently not working or operating properly before we went on the market and they did. Since the owners of Home A were also looking to purchase a home, we toured a few homes and they could really see how appealing a home was when it was decluttered, cleaned, and nicely staged. I also suggested waiting until after the 4th of July to go on the market since so many buyers were taking some time off from their search over the holiday. They also agreed to this. We spent a long time discussing comparable homes that had recently sold as well as what effect the adjusting market should have on the list price. They listed to my suggestion for a list price and when it came time to put the home on the market, everything was ready to go and it was priced just right. After one busy weekend of showings, they received a full price offer on their home with the offer of a short rent back which worked perfectly with their plan to buy another home. This was a perfect example of what to do when selling your home.
Now, let’s talk about House Z. House Z was a long way from being ready to go on the market when I first saw it. I gave the exact same advice to these sellers about decluttering, deep cleaning, cleaning up the lawn, and making sure that everything was in working order. These sellers were not looking to purchase a new home, but I did offer to show them a few homes currently on the market so that they could get an idea of what homes currently on the market looked like. They declined that offer. I also suggested waiting until after the 4th of July to come on the market, but they did not want to wait until then and came on the market just before the holiday weekend. We discussed an appropriate list price and comparable homes that were currently on the market (competition) or had recently sold as well as the changing market conditions. Unfortunately, they chose to come on the market $50,000 higher than I recommended with a house that still needed a lot of repairs and a yard and flowerbeds that were overgrown. Needless to say, the experience of selling House Z did not go nearly as well as it did for House A. In the end, it took over 50 days and multiple price reductions to get an offer on the home. They ended up selling for $95,000 less than the original list price and gave almost $10,000 as a credit to the buyers for all of the repairs that needed to be made to the house. This was the perfect example of what NOT to do when selling your home.
I’ve been using this cautionary tale with all of my sellers as the market corrects. And right now, with the ever rising interest rates and adjusting home prices, it’s even more important to work with your Realtor and listen to your agent’s advice so that you can end up like House A and not House Z. You want an agent who knows how to read not just where the market has been, but where it is now and where it’s going to go in the near future as you prepare to list. This is what allows you to price and strategize appropriately to make your sale go as smoothly as possible. And just a note here at the end, the days of taking a weekend to sell with multiple offers over list price and waived contingencies are gone and probably not coming back. What we are entering now is just a typical balanced real estate market and understanding and adjusting to the market is what your Realtor is there to help you with if you only listen.