After a booming couple of years, the Market appears to have shifted lately from a hot seller’s market to one more in the buyer’s favor. That means that sellers need to shift their thinking to accommodate current real estate trends. My home selling tip this week helps you separate fact from fiction and tells you how to avoid losing out on a sale.
Home Selling Tip: Two Truths and a Lie
Truth #1 – Rising Interest Rates May Hurt a Home Sale
Home buyers became used to extremely low interest rates over the past couple of years. That is one of the reasons that the Lake Havasu real estate market remained so hot during the pandemic. But now, interest rates have gone up. In fact, they more than doubled since January 1st of this year. That adds hundreds of dollars to a home buyer’s monthly mortgage payment. In turn, the buyer may get scared and decide they cannot afford the home after all, ending the sale.
To combat this possibility, ask for a current pre-approval letter (one done within the last 30 days) when a buyer submits their offer. Also, look to see if their mortgage rate is locked in. Since rates have been steadily rising for the past few weeks, locking in their rate makes it less likely that they pull out of the sale while you are in escrow.
Truth #2 – Contingencies are Back
This time last year, bidding wars were a common theme as buyers battled against one another for the limited inventory available. Many buyers waived most contingencies in order to make a deal happen. Nowadays, with inventory on the rise and a shifting market landscape, buyers are beginning to ask for contingencies again. This includes home inspections. If something comes up during a home inspection, buyers may ask for the seller to fix it or threaten to cancel the sale if they do not.
My home selling tip to avoid this issue is to get an inspection of your own done before you list. This helps you identify potential problems and perform your own due diligence ahead of time. You may either fix the issue(s) before your property hits the market or you can gather estimates of what the work may cost to complete. Then, present this information to the buyer if it becomes an issue after their inspection. Then, negotiate a discount on the sale price to offset the cost and seal the deal.
Lie – Buyers Will Always Pay the List Price
In the past, bidding wars often drove prices well above the initial list price. And prices continually went up, up, UP! Unfortunately for sellers, that is no longer the case. Pricing your property correctly in the first place has always been key for a successful real estate transaction. Take emotion out of the equation. Ask your REALTOR® for their educated opinion about the current state of the market. What price do they believe you should list your home? Sometimes, listing it slightly under market may even help sell your home faster, especially as home values begin to decline. Whatever you decide, keep the current market trends in mind to determine the right price that will snag a buyer quickly.
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