How are things? I hope all is well. The housing market is so chaotic right now, so I wanted to share some thoughts and advice that I figured might help. This is coming from a good place and it’s based on observations and conversations with the real estate community. I hope this helps.
HousingWire Podcast: By the way, here’s a podcast I did last week with HousingWire to talk about appraisals in a hot market.
THINGS TO KEEP IN MIND ABOUT TODAY’S MARKET:
1) Don’t price for the unicorn: Every area has the idea of unicorn buyers who swoop in to pay way more than anyone else. That’s the dream, but fixating on an outlier buyer can be a huge mistake that means you sit instead of sell. My advice? Price for the market that actually exists and rejoice if you get bid up.
2) Don’t expect cash: Selling to a cash buyer could happen, but how many cash transactions are happening in your area? In Sacramento so many sellers dream of greenbacks, but only 14.4% of all sales have been cash this year. Remember, the vast bulk of the market is financed, so buyers using financing CAN get it done.
3) Be realistic about timelines: Nearly every real estate vendor is slammed, so if you counter the buyer, be realistic about longer turn-times. You don’t want to be like, “You have 8 days to get everything done” when that might not be enough time (especially for the appraisal).
4) Be careful of greed: The obvious goal is to net as much money as possible, but helping a deal also feel like a win for the buyer can help a transaction close. Yes, buyers are willing to pay more today, but they also want to feel like they’re paying a mostly reasonable price without being taken advantage of.
5) Apples and oranges: Pricing an apple according to an orange is a classic real estate mistake. Too many sellers want to price based on a sale or listing that is superior in quality, condition, location, or some other feature. Here’s the strategy. Price according to similar homes – not dissimilar ones.
6) The Zestimate: Um, yeah, don’t get distracted by Zillow’s value.
7) Get inspections first: This might seem odd, but many real estate agents in today’s market actually recommend getting a home inspection and pest inspection up front so buyers can know exactly what is going on with the house before making an offer (this can at times help buyers remove the appraisal contingency too). Not everyone agrees with this strategy and it won’t be relevant in every market, but it’s something to maybe talk about with your agent.
8) Know if the market slows: At this time of year we usually start to see seasonal slowing, so as you list in coming weeks and months be realistic about the market if it does change. Look, right now things are ultra hot and the verdict is still out on what type of season we’ll have for the summer and fall. It usually softens, but we’ll see what happens this year. All I’m saying is the temptation is to price according to the hottest moments from a few months ago, but if you’re late to the spring party be sure to price according to however the market feels at the moment.
9) Listen to lower offers: I talked with a seller recently who had four offers and wanted to hold out for something higher. Look, if buyers are coming in lower, it’s time to listen to the market. Don’t get so infatuated with hot headlines that you aren’t listening to actual buyers trying to purchase your home. And if you’re not getting any offers, maybe the market is trying to say something…
10) Expose yourself: Okay, keep your clothes on, but be sure your home gets adequate exposure to buyers. Honestly, you really only need a weekend in today’s market. I’m just saying you may not want to sell within the first few hours. Having at least a few days gives more buyers a chance and it’s actually helpful for those who offered to have a little bit of space to be sure they don’t have remorse about offering.
11) Other: Real estate professionals, what other advice would you give? Please comment below. Thanks to so many real estate friends who shared bits of wisdom on Instagram and Facebook too for this post.
I hope this was helpful.
Certified Appraiser / Housing Market Analyst
Sacramento Appraisal Blog
p.s. Thanks for picking up the dog crap before the appraiser shows up