Market Update with Seller Strategies & Tips for Buyers
The rhythms of summer seem to be both fast and slow, lazy and crazed, so hot and sometimes so cold (why do we over air-condition?!). Real estate this year is currently following the same pattern. Four of my latest listings never made our newsletter because they went under contract with the first person who saw the home the first day they were on the market. Two of those homes had actual bidding wars. And yet, several of my listings have been on the market for two or three months before getting an offer. The same is true for my buyers’ home searches. There have been a few times this year when I’ve had to help buyers navigate bidding wars to get their home. However with other buyers we have had the luxury of time in searching for potential homes with some buyers getting all of their closing costs covered and sometimes even a bit off the list price.
Market UPDATE:
Despite what you might be reading in the news, Watkinsville, Oconee County, and Athens aren’t seeing massive price drops. Sellers are holding on to their homes if they can’t get the equity they feel they have earned through a high sale price. Buyers are also expecting to get a lot when they buy a home. They are, after all, about to embark on a pretty high monthly payment if they are getting a loan. Gone are the days where inspections are waived. Even with bidding wars, sellers are fixing issues with their homes. As I talk to other agents in our area we are all seeing the same thing - there just aren’t as many buyers in the market.
So what does that mean for you, future buyer or seller?
Marketing strategy For sellers:
Great Condition - You need to have your house in the best shape possible.
Fix the wood rot, clean the windows, de-clutter those closets. Use our Preparing to List Checklist to help you get started. If you think you may have a major issue like a roof, HVAC or foundation problem, go ahead and get some professionals out to see if you should fix something or at least to be prepared for how much it will cost you when the buyer asks for the repair. Use our Preferred Vendors list for recommendations.
Pricing - Having your home priced well is essential.
This does not mean though that you should automatically just have a lower price on your home! When I price a home, I don’t just look at the Zillow price. I look at what your competition is. How many homes like yours are currently on the market or have just sold? If there are a lot of similar homes (same size, area, condition, yard) and if you want your house to sell quickly, you will need to differentiate it either by pricing it a bit lower or by highlighting some features that make it stand out. If I see that homes like yours seem to sell quickly then I will feel more confident in encouraging you to price your home on the higher side. Since I represent buyers as well as sellers, I have a good feel for what most buyers really want in a home (primary suite on the main floor or a ranch; a completely updated home; great location). With one of the homes that went in a bidding war, I actually strongly encouraged my clients to list the house significantly higher than they were thinking. It had been completely updated in a desirable neighborhood where complete updates were rare. The price per sq. ft. of other homes in that neighborhood would be comparing apples to oranges. We priced it higher and still had a bidding war. Another home that recently sold for list price had very few comparables in the neighborhood so I looked at similar homes in the area. The week we were going to list, another home in their neighborhood hit the market 100k less than we were going to list their home! The homes were very similar except my clients had an unfinished basement and an incredible lot that I didn’t see in any nearby neighborhood. We stuck firm to our list price and went under contract the day it hit the market!
What do I do if my house isn’t selling?
For homes that aren’t getting offers, I don’t automatically jump to a price drop. First I consider the feedback I get from agents that show the home. Is there one thing the sellers could tweak that would make a difference like painting a room or trimming bushes? If I am not getting much feedback from other agents, then I am going to host an open house for realtors, feed them, and pick their brains. Recently, I did this on a listing and one of the agents I really trust said that the vacant home didn’t feel homey enough. So, that Saturday, Latetia and I loaded up a U-haul and staged the living areas of the house (see photos). Sometimes these open houses do lead to feedback that there needs to be a price drop. Having good relationships with local agents means I have a team of people who are willing to give valuable insights.
Proper expectations - be prepared for your house to be on the market for two to four months.
Be honest with yourself (and me!) about your ultimate goals and needs. If you are moving out of the area, how long can you carry the cost of owning the house here? If you have a bottom line, why do you need or expect to get that much for your home? Is that realistic? Are you open to renting your home if it doesn’t sell for what you want it to? Currently I am working with some sellers who would prefer to move to a different area but it isn’t essential. That is guiding our strategy. We just got an offer and are countering with their bottom line and communicating to the other agent that this is it. These sellers are prepared to stay in their home and try again next year if it doesn’t sell right now. My goal is always to help you as the seller get to your goals using my expertise. Some of that expertise is helping you as the seller think through your ultimate goals and not just the sales price number you would like to get.
Tips For buyers:
Know your numbers.
The biggest thing I am noticing with buyers is their shock at what their monthly payment will be on the median priced home. This BLOG walks you through these specific numbers. Before we ever go look at homes, speak with a good lender, figure out what you are able/willing to spend each month which will give you the price range we should be looking at homes in. Click HERE for a list of lenders to contact.
Enjoy more time but be ready to make a decision.
Fortunately most buyers today don’t have to see a home the day it hits the market and make an offer the same day. I once again am spending days looking at multiple homes with buyers. It is nice to have space and time to decide what you want. But, if what you want is very specific, there is still not tremendous inventory. You need to be ready to jump on a house and make a decision quickly. Bidding wars do still happen for those special homes.
Offering list price might be worth it.
Even though we are seeing a bit more inventory, this is really a balanced market and not a buyer’s market like we had in the last recession. I am rarely seeing homes selling for significantly under their list price, especially if there has just been a price drop. Negotiating $5,000 or $10,000 off the list price does very little to your monthly payment but psychologically it often will make sellers say that they are doing little to no repairs on the home. If you are going to be in your new home for more than two to three years, that $5,000 negotiation isn’t going to make a huge difference. Whereas having the seller put on a new roof or fix a water issue in the foundation will greatly impact your home ownership costs. Sometimes you can get a lower purchase price and have the seller make major repairs but often sellers won’t do both. Sometimes though, it seems unlikely that there will need to be major repairs and so that might be a good time to negotiate a lower price when making an offer. Unless a house just hit the market, I do think that buyers should ask for seller-paid closing costs which helps you keep more cash in your pocket.
With proper expectations, this is a great time to buy and/or sell your home. If you live outside of the Watkinsville, Oconee County, and Athens areas please let me know if you are seeing something different in your markets!