Now that you know the housing market is stuck, that buyers are competing for a very limited supply of inventory, and sellers are getting over asking price- you’d think it’s a sellers’ market- right? Yes, and no. And not so fast.
Yes, for the past couple of years buyers are having an increasingly tough time out there in the trenches. And it’s most especially difficult for first time buyers. But sellers need to be careful for what they wish for. And they need to be just as savvy as their buyers.
When considering listing your property for sale in today’s market, one might think “it’s such an easy market, I’ll sell my property myself!” However, caution is urged for the following reasons. And this is when the professionals need to enter the picture.
Unanticipated complications for both parties can appear in any transaction. But a different sort of complications appear in a rising market, such as what we are currently experiencing. While you, as the seller may get over, just over, or well over your asking price- this could set up a recipe for failure. Unless a buyer is paying in cash, or a good percentage of cash, the bailiwick is in the property appraisal.
If the buyer’s lender doesn’t arrive at an appraisal equal to, or greater than the agreed upon price- someone will have to put up more money. If the buyer simply cannot afford to do this, you’ll have to re-negotiate downward. Not a pleasant experience, after you’ve been counting your proceeds before they hatch- er close.
Alternatively, you could refuse to sell at the lesser price, but then you’d have to put your property back on the market. Which would re-open the entire process and add the dreaded days on market count- always a negative in a buyer’s mind. And it becomes a negative for you too, because it usually results in a lesser sale price after all your trouble.
If the buyer is putting down a small amount down with an FHA (government backed) loan, lender restrictions may require you to make certain cosmetic repairs based on possible lead paint, or update antiquated code issues prior to selling. This may also require further negotiation, complicate the selling price and add closing delays.
The property transaction process is a symphony of events that need to time perfectly with both parties. Your experienced agent will oversee progress on the buyer’s end as well as yours. And they'll work with your buyer's agent and lender to keep the entire process on track.
If you are selling an older home, it’s in your interest to do a pre-inspection. Yes, do it and pay for it prior to listing- because it could save you hundreds or even thousands of dollars. A pre-inspection will put you in a better position to negotiate because you’ll know the flaws and necessary repairs prior to putting your house on the market. Some you’ll learn you’ll need to repair. Others you may elect to leave.
Your agent will consult with you on these issues as well as other improvements made in the past. Improvements that may have been made prior to your ownership, some of which may not have been done to code- or may require old permits be closed out. When improvements were not done to code, and a lender is involved, a professional should be hired to do the job right and close out the permit.
Finally, in such a low inventory market with rising prices it’s not only tempting, but often required by the seller that a buyer drop normal contingencies. While this can be a risky business for buyers, it frequently happens. However, it could also backfire on the seller in unespected ways.
By hiring an experienced, professional real estate listing agent, you will accomplish much in protecting yourself against these and other costly mistakes and potential closing delays.