4 Big Incentives for Sellers
The housing market keeps sailing along. The only headwind that could take it off course is less inventory for sale. The?National Association of Realtors?(NAR) reports that there were 12%?fewer single-family homes for sale this July than in July of 2020. Although there was a 7.3% up-tick in inventory from June to July this year, the key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that?selling?their homes could be challenging for several reasons.
Recently,?Homes.com?released the findings of a?survey?that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s actually happening in the housing market today.
1. Homeowners don’t know if they’ll be able to secure their next home before selling.
In negotiations,?leverage?is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.
In today’s market, buyers have compelling reasons to purchase a home now:
These buyer needs give the seller tremendous leverage.?Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.
This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.
2. Homeowners don’t know if their current home will sell for the asking price or top market price.
This is the perfect time to maximize profits while selling a house. NAR just released a?study?showing that?bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of?2.4 to 4.8 offers.
Whenever there’s a bidding war, the price of the item for sale escalates.?Bloomberg?recently?reported:
“For the first time ever, the average U.S. home is selling for above its list price.”
If a seller is looking for a top-dollar sale,?there’s no better time to sell than right now.
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3. Homeowners don’t know if they will get an offer without their home requiring work or updates.
Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.
A recent?post?on whether or not to renovate before selling notes:
“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”
If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.
4. Homeowners don’t know if they can have a quick closing process.
When speed is important, there are two points sellers should look at:
In the latest?Existing Home Sales Report, NAR explains:
“Properties typically remained on the market for 17 days in June, down from 20 days in July, unchanged from June, and down from 22 days in July 2020. Eighty-nine percent of the homes sold in July 2021 were on the market for less than a month.”
Seventeen days is fast and it’s a new national record. But for Sellers here in Williamson county Tennessee homes were on the market for only 6 days before contract and 32 days from listing to closing (July 2021)! Davidson county showed similar results with homes on the market for only 8 days until contract, and 27 days from listing to closing.
If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time.
Bottom Line
Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Contact me today to learn more about the opportunities for homeowners who are ready to sell.