If you’ve been reading my market updates you know that we are in a sellers market. There are more buyers than homes listed for sale, and home values have increased by more than 5% each year since the great recession.
There’s no better time than selling when the inventory is low and values are high!
But selling is not easy and can be very stressful.
So, before you put your house on the market consider the 5 challenges you will face in today’s sellers market.
#1 Not Every Home Sells in One Day
Just because the house down the street received multiple offers on day 1, does not mean that yours will sell quickly, too. If your home is located in a desirable school district and listed in the lower or middle price ranges, many buyers will be looking at your home. Finding a suitable home between $200K and $350K in Dublin is tough. However, buyers are picky. You won’t get an offer, if it is overpriced and not updated.
The average Days on Market (DOM) is still 50 days in Columbus. This means that half of all listings take more than 50 days to sell.
I believe you need to give buyers and agents sufficient time to look at your property to get multiple qualified offers above list price. That’s why I don’t recommend my sellers accept offers right away, but specify an offer deadline several days after listing the property.
#2 More Buyers Get Cold Feet in a Sellers Market
Many listing agents encourage their sellers to accept the first offer. This may come back to haunt them. If buyers are rushed into making a buying decision they often regret it. Buyer’s remorse happens frequently in today’s market. Buyers have many opportunities to get out of a contract: after the inspection, after a low appraisal or due to financing problems.
In some cases the seller may be able to keep the earnest money, but you will lose valuable time, weeks, even months, and the second offer is usually lower than the first.
Giving your buyers sufficient time to contemplate their purchase decision will result in better offers and fewer contract cancellations.
#3 The Highest Offer is Not the Best
If you receive multiple offers on your property, the highest purchase price may not be the best. Financing, closing costs, time to close and special contract terms may disqualify the highest bidder. You need an agent who understands what contributes to a successful transaction. Your agent must be able to compare different offers and explain which one’s the best for you.
In today’s competitive market many agents include an escalation clause in their offer. This means buyers promise to match other qualified offers, up to a certain amount. Do you know how to handle these offers correctly without violating fair housing rules?
As your listing agent I ask each buyer’s agent specific questions to determine how well the buyer is qualified and if they have the financial ability to perform on the contract no matter what.
#4 The Appraiser May NOT Agree with the Purchase Price
When buyers offer more than asking price, the lender’s appraisal will often come in low. If you accepted a purchase offer without an appraisal clause, the buyer will be obligated to move forward with the contract. However, many buyers don’t have the cash to pay the difference and the deal falls apart.
I always want to make sure the buyer has the cash to close if the appraisal comes in short. We also advise you of loan products that are more susceptible to low appraisals, and of lenders who are known for closing delays.
#5 Hiring the Wrong Agent will Cost you Thousands of Dollars
In this sellers market it is more important than ever to hire an experienced listing agent who will truly represent YOUR interests and get you the most money for your property.
Most home owners who try to sell without an experienced agent don’t know how to handle these challenges. A wrong decision could cost you tens of thousands of dollars.
Six Signs of a Great Listing Agent
- Has local experience, closed deals in your area and works in a local office.
- Is a full-time professional committed to your listing, not a part time, hobby agent, discounter or real estate assistant.
- Works with buyers and knows exactly what today’s buyers are looking for.
- Has a list of pre-qualified buyers who may be a fit for your listing.
- Is committed to professional marketing, including high quality pictures and videos of the property, even if the property sells quickly.
- Has a written strategic plan on how to market the listing and sell your property for top dollar