PROPERTY VIEWS | To sell or not to sell
There is no doubt that our real estate area is in a seller’s market. What does that mean? The real estate demand is greater than the supply of real estate inventory. Our market in this area has been a seller’s market for almost three years. So why does our real estate inventory remain historically low?
There are many reasons for this, but the main reason is that people are afraid to sell their houses because they may not have a house or condo to move into. Unfortunately, with the high demand, this problem is compounding itself, becoming a self-fulfilling prophecy.
If you have owned your home since the last downturn in the market, it is OK to start dreaming again. Most sellers are doing well, but it’s important to consider the timing of the sale of your home. As challenging as it is to buy in a seller’s market, it is far better to sell your existing home during the window of time that’s closest to the peak.
Documented, historical data for the Seattle area shows that our market runs in cycles, which would suggest that the cycle will peak sometime in the next two years. Today, we are in a window where sellers have the advantage of pricing power, timing and certainty of closing. If you wait and miss this cycle, you could be faced with a buyer’s market, such as the five years from 2008 to 2012. It wasn’t until 2015 that homes regained their values to peak 2007 pricing levels.
If you are OK waiting for the next Seattle housing peak, which could be as far out as six to eight years from now, then enjoy watching your equity grow. If you think two to three years from now is the optimal time to sell, consider the potential loss of that equity in your decision.
From one home to another
As real estate brokers, we have been trying to expand our ideas to be more creative in how we approach selling homes and providing constructive strategies during the process. Consider these strategies:
•Ask buyers for a “60-/90-day rent-back period” to allow time for a seller to find a home — In this scenario, a seller can close on the home, continue to stay in it for 60 to 90 days and then use that money to buy another home.
In this seller’s market, this is not an unreasonable expectation for buyers, who are looking for strategies that will allow them to win. We have seen buyers let sellers stay in their homes for up to six months for free!
Make sure you are protected with a proper rental agreement prepared, and it’s always a good idea to get advice from an attorney. But don’t be afraid to ask — this is a seller’s market!
•Ask buyers for a long closing — This may work better for you if you do not need money from the sale of your house to purchase another home. This way, you can take some time looking for a new home or condo knowing your home will close.
•Get pre-approved to purchase a new home — You may be surprised how much you can qualify for. This way, you may be able to get under contract on a new home before you list your current house. Many sellers have felt a sense of clarity in selling their home when they know where they will move to.
•Don’t be afraid to rent a place for a little while — We have found fun places for sellers, to rent such as Whidbey Island for the summer or downtown in a penthouse by the Pike Place Market. This way, you can move out of your home and put the house on the market, giving it the best chance to sell at the highest price in the shortest amount of time
Pricing it right
Many buyers are getting really beat up in this market, spending thousands of dollars on pre-inspections and sewer scopes, only to lose out on a house to an all-cash buyer. Their frustration can work in your favor, but when pricing your home, be strategic and smart.
Every property is different and unique. The magic that can happen in a seller’s market only happens if the property is positioned to attract multiple buyers who are willing to overpay to win. That doesn’t always happen, even in this market.
Work with your agent/broker on researching good comparable sales in the last six months. Understand your neighborhood and what properties have sold for in the immediate area.
Be comfortable with the price so if only one buyer writes an offer, then you can feel good that you priced your home perfectly. You can only sell your home to one buyer!
MARGIE ZECH and KATHRYN HINDS are Realtors with Windermere Real Estate. To comment on this column, write to MPTimes@nwlink.com.