The housing market is a sizzling seller’s game at the moment, where homes stand to spark bidding wars and sell for sky-high prices.
While inventory levels were low before the pandemic, COVID-19 caused many to re-evaluate their shelter needs, resulting in further demand for homes and a continued lack of inventory.
All in all, this is great news for sellers—yet with soaring prices and high expectations come a whole new set of possible pitfalls that could trip up inexperienced sellers, particularly if they’re selling for the first time.
Curious how you might risk ruining a good thing? Here we identify what many first-time home sellers get wrong when listing their home today.
1. Overpricing your property
Just because it’s a seller’s market, don’t think “red-hot market = super high list price.” A smarter strategy is to list the home at or near market value and allow the market to do its magic.
Sellers often erroneously believe that the list price means the desired purchase price. In a seller’s market, the list price simply indicates an approximate price, and its purpose is generate interest and activity.
The greater the interest, the more likely the price will climb as eager buyers bid on it. The home will generate more interest with a lower asking price but you want to start with a list price that is close to the estimated market value.
2. Skimping on home showings
In our not-quite-post-pandemic era, some homeowners may list their property, then feel skittish about having strangers traipse through. To cash in, however, you can’t wait it out.
As soon as the house is listed, it’s vital to allow as many qualified buyers view it as possible, to help take advantage of the initial interest the property will garner as a new listing. A seller has a fairly short time window to do this effectively, as if the house sits on the market, buyers will assume the home is overpriced, or that something is wrong with it. In this market where homes often sell within 7 days or less, this is even more crucial.
If you’re truly uncomfortable with in-person showings or have serious scheduling conflicts, virtual tours may separate out looky-loos from truly interested parties. Then, once you know you have a prospective buyer who loves your listing, you can have them scheduled for a (masked) showing.
3. Staging slip-ups
With houses selling so fast, you may think you needn’t bother with professional staging. Still, if you want to fetch that dream price that you’ve heard is within reach, it could pay to present your home perfectly, with some professional home-staging.
Staging can reduce a property’s time on the market considerably and have a 1% to 5% increase in value offered by buyers.
Just be aware that in today’s market is keeping these interior design pros busy—as in booked solid for months in advance. So plan ahead.
4. Seeing only dollar signs
A big payoff is tantalizing, but money isn’t everything.
Many people look at price as the end-all-be-all, but a smart seller considers a variety of factors to make an educated decision. For instance, the highest offer may have a loan with an inspection and/or appraisal contingency, while a somewhat lower offer might be in cash and as-is.
Perhaps the bidders with the highest offer need to sell their home first. That could mean a slow or snag-filled deal. You might be better off taking a slightly lower offer.
5. Pouncing on an implausible offer
Guess what: Buyers know it’s a seller’s market too, so some may make bids with terms they don’t intend to honor just to beat out the competition—offers that can fall apart in financing or upon appraisal or inspection.
In this market, it’s not uncommon for a buyer to submit an offer for a home, sight unseen. Then, if the buyer doesn’t like what he eventually does see, the offer can be withdrawn, and the property is likely to lose traction when it is relisted.
The takeaway? If something seems too good to be true, it usually is! Work with your real estate agent to understand who is bidding and how serious they are, to reduce the risk or your home sale falling apart.
6. FSBO blunders
While “For sale by owner” sounds like a direct route to extra profit, cutting brokers out of the picture is a risk.
Today’s sellers may be tempted to try selling their house on their own, to save the agent’s commission. But doing so severely limits your exposure.
FSBO homes, after all, can’t be listed on the Multiple Listing Service (MLS), which is where real estate agents search for homes for their clients, and where the majority of buyers shop for homes (even if they don’t know it as sites like Realtor.com and Zillow receive their listing data from the MLS). This exposure is crucial if you want to reach a large audience and fetch the best price.
At the very least, put the house on your local MLS through a flat-fee listing agency. You’ll still be responsible for the commission to the buyer’s agent, but by reaching more potential buyers, you’re apt to get a higher price.
Also, in this era of bidding wars, having an agent at your side is a huge help. Navigating a flurry of “highest and best offer” bids is tough, even for an experienced seller!
7. Setting up your next move
So you’re all set to sell your house—great! Now, what’s your next move? Avoid winding up with an anxious buyer on one hand and no place to go on the other.
It can be difficult to find the right new home and to time your transactions in this market, so start searching immediately once your property comes to the market, if not before. It’s a good ideal to negotiate an extended closing or leaseback, or even make the sale contingent upon purchasing another home.
8. Assuming this hot market will last
Inexperienced sellers may turn down a worthy offer or even forestall listing their home, hoping prices will continue to go up. While it may take a while for the seller’s market to top out, interest rates have already started to creep up, which overtime will reduce the pool of eager buyers.
Generally speaking, now is a good time to both buy and sell, with historically low interest rates fueling activity. But with rates on the rise, the pool of buyers will shrink leading lower demand and eventually greater supply. Overall, we encourage our clients not to try to time the market, but to let their own specific housing needs dictate what they do.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please give us a call and we’d be happy to assist you!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Downtown Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Galena 43021 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington 43147 Polaris Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235
