POST WRITTEN BY Matt Woods
It’s no secret that the long-running seller’s market isn’t quite what it used to be. Following a few months of growth, home sales have begun to decrease and in some ways, conditions for homeowners have become slightly less favorable. That’s not to say that they’re terrible — but according to recent data from from the National Association of Realtors (NAR), sales of existing homes have begun to taper off.
There are a number of potential factors here. One is that mortgage rates have risen from their all-time lows in recent years, reducing buying power and creating reservations with many buyers. Additionally, listing prices have become overinflated, which has scared away some potential buyers.
According the NAR Housing Affordability Index, median family income rose by 3.34% year over year (2017 to 2018), while qualifying income rose by 11.82%. This discrepancy is a contributing factor to declining overall existing home sales. To add insult to the situation, median single family homes sale prices increased by 5.14% year over year (2017 to 2018).
While these trends are particularly important to pay attention to as spring home-selling season is fast-approaching, declining sales rates still may make for a robust spring. For sellers, then, better times may be right around the corner. Put simply, even in a market that’s not quite seller-friendly, there are still plenty of options for selling homes expediently, and for getting top dollar.
While the real estate industry was not an early adopter of technology, it has come a long way. The avenues that homeowners can use to sell their homes are plentiful and effective, despite market conditions.
Here are some approaches to consider if you’re putting your home on the market:
• Go FSBO: Sell your home on your own. This saves the cost of having to pay real estate commissions, though it does mean all the work falls on the seller, a significant burden for most — particularly for a first-timer. And despite saving on the costs, selling on your own doesn’t always equate to netting the most money.
• Get an MLS listing: There are services that will do this for a few hundred dollars, but that is often money well-spent to increase property exposure on the multiple listing service.
• Work with a full-service real estate agent: This option will provide personalized guidance, but for a cost. Sellers can pay as much as 6% in commissions if they choose this route.
• Opt for a discount or flat-fee agent: This can be less expensive than working with a traditional broker, but often the services offered are “discounted” also. That said, selling a home can be very stressful and an emotional experience — not something to ignore.
• Sell to an iBuyer: Investors may be willing to purchase the home as-is. This process can be very quick and removes much of the stress involved with trying to coordinate fixing up and showing a home, as well as timing a sale with the purchase of a new home, but the seller risks walking away with less than what you might through a traditional sale process.
This plethora of options can be both a blessing and a curse. The challenge lies in identifying which of these options will be the most helpful to the seller not only in their given market but also taking into account their personal preferences. Sellers should arm themselves with education about the process and all their options to determine which avenue will meet their needs.
The takeaway from all this? The market can be volatile and have a strong impact on the process of selling homes. That said, the method homeowners choose to sell their homes can have just as large an impact on the process as the market conditions. Be informed, even if it means taking charge of the research process. Selling a home is hard work, not to mention one of the largest, most emotional transactions most Americans engage in, so it’s not a process to be taken lightly. Know the market, do the research and tap into the right resources to move confidently into your next home.