Should I List My Home In A Seller's Market
It's common to hear terms like "seller's market" or "buyer's market" in conversation around town, referring to which party has more leverage / buying power in the marketplace. A lot of this has to do with the simple economics of supply & demand. It has been a "seller's market" in our Central Wisconsin market for about 4 years now (some may argue more), with it being especially strong during the pandemic 2020 - 2021. Many people considering downsizing, upsizing or making a move have been thinking through how long the market will continue to "be favorable" towards sellers.
During the pandemic the historically low interest rates boosted the demand, and since then, the buyer-demand has stayed relatively high. Even as interest rates continue to climb, the demand remains strong. Many initially thought the rising interest rates would deter buyers from purchasing, but the low inventory has kept the demand & competition high amongst buyers. We have seen the average days on market for higher price points ($350K+) start to increase, but compared to past years, the sales cycle remain relatively short.
Establish your goals.
When it comes to selling your home, you probably have asked, "should I list my home if it will likely sell on its own?". To help answer that question, we have to first start with your goals. Are you hoping to net the highest amount for your home? Are you hoping to sell quickly due to a relocation or life change? Are you wanting to help out a family member or friend who wants to purchase your home? The list goes on and on and it varies from seller to seller. In general, when your home is listed, it reaches a larger audience of buyers. This can help you attain the highest price for your home and is likely to sell quicker than if you sell it on your own. First take time to reflect on your goals in the sale. This can help you determine if you want to hire an agent to help or if you feel comfortable going through the process on your own.
Don't leave money on the table.
For most people considering selling, they may have one or two buyers in mind who've expressed interest in their property, which is great! A few difficult aspects in selling your home on your own is #1 establishing a fair price given the current market conditions and #2 finding a qualified buyer who financially, whether with cash or a loan, has the financial capacity to purchase your home.
Let's start with establishing a price. There is a lot of factors that go into establishing a price for your home. An agent will help you 1.) look at comparable properties that have recently sold in your area, 2.) review homes that are currently active on the market ("your competition"), and 3.) view homes that are under contract. Taking that preliminary information and then making additional adjustments based on the condition of the home, age of mechanical & cosmetic upgrades, as well as the land value and location are all factored into the pricing strategy. If you take a guess at the value of your home without understanding the market, you could be leaving money on the table, in some cases thousands of dollars.
Again, it goes back to your goals. If you are helping out a friend or family member, perhaps getting the most out of your property isn't a top priority... If you are wanting to use the sale proceeds toward purchasing land & building or another home, perhaps it's useful to get as much as you can for your next place.
Finding a qualified buyer.
Finding a financially qualified buyer matters. Many people looking to buy 5-10 years ago may have gone "house hunting" first and if they found a home they loved, then went through the pre-approval process. Today, many buyers are getting pre-approved on the front-end with how quickly homes are selling, in some cases their pre-approvals are already pre-underwritten, so they can get their loan to the closing table in half of the time. Making sure the buyer purchasing your home is financially able to is the first step in a successful transaction. Otherwise, you may end up going through other steps like the inspection, to find out they aren't able to obtain their loan. Working with an agent does not guarantee there won't be any hiccups in your transaction, but they can help guide you through step by step, so you're educated, confident and aware of the potential risks.
Another thing to consider is your home's condition. Some are in pristine condition and will likely qualify for any type of loan. More often than not, homes have a few blemishes or older features that won't deter buyers from wanting to purchase it, but may cause a few hiccups during the transaction - which may mean extra work / repairs during your sale. Understanding the type of loan the buyer is using can help you determine if the appraiser is going to have stricter guidelines to adhere to per the lender/loan program.
An agent will help you understand the contingencies in the offer that essentially protect the buyer as they prepare to purchase your home or property. Although your home may be extremely sale-able, it is helpful to understand how the contingencies may affect you and your timeline in your sale. If you are on a strict deadline, having an offer with few contingencies and your asking price may be more appealing to you than a very high priced offer with many contingencies. It comes down to your goals and understanding the risks involved with certain contingencies before accepting an offer.
Although it is a sellers market, there are numerous benefits of listing your home with an agent. It may help you reach a broader buyer pool, net a higher return on your sale, and provide you a guide to navigate the market, offers and contingencies.
Let's get in touch.
If you have questions or want to connect further to discuss your home sale, feel free to contact our team.