The seller forecast for 2017:
The outlook for sellers has continually been improving over the past several years, and all indications are that trend will continue. There are more buyers, prices are up, and inventory has remained fairly low.
Check out the number of days on the market that the average house sold for over the past several years. That number has been plummeting.
I do get the sense that there are a lot of sellers who have been on the sidelines for several years, wanting to sell but waiting for the right time. There is some concern that if all of that shadow inventory starts coming back on the market, there will be too many houses for buyers to absorb, leading to pressures to lower prices.
|Averages to sell a home in New Hanover County
in 2012: 137 days on market
in 2013: 121 days on market
in 2014: 116 days on market
in 2015: 96 days on market
in 2016: 81 days on market
Sellers were forced to stay on the market for a long time, take less than their worst nightmares, and then have buyers who felt like they were paying too much become overly demanding over repairs. With the new due diligence period, buyers could walk for any reason, and this made selling even more frustrating and challenging.
The market started changing in 2013 and I believe it will continue to improve for sellers. While there are a lot of people out there who would like to sell their home, they are not willing to sell it for what the market wants to pay, so they are sitting on the sidelines waiting on the market prices to move up. New home construction is still not at the levels it was five years ago. These factors have caused inventory to drop to lower and lower levels. Inventory in New Hanover County in 2008 averaged over 3500. It currently stands at less than HALF that amount.
Even though demand has remained steady and inventory has fallen, sellers still face other challenges. Fewer buyers can qualify for loans under new rules. New rules with appraisals make it more difficult for home values to increase quickly. Your home may be worth $200,000 to a buyer, but if the last two similar comps sold for $175,000, it is only worth $175,000 to the bank. Your buyer can still buy the house, but the bank is only going to loan the buyer the reduced amount.
Still, here's the bottom line: right now it is a better time to sell than it has been for the past five years. Will it continue to get better? I expect it will, but I don't see prices going through the roof anytime soon. I expect to see moderate gains, around 3% per year, for the next few years. So from a financial standpoint, it really doesn't make a lot of sense to wait to sell. Especially if there is somewhere else you want to be. If you are buying in the same market you are selling in, there is no real loss.
My motto is, you only live once, you might as well live where you want to.
What Every Seller Should Know
The Selling Process
1. Meet with a licensed Realtor to discuss the process. That discussion should include:
--Motivation for selling
--Home valuation and pricing strategy
--Getting house show ready
--Pros / Cons of a pre listing inspection, making repairs and updates
--Showing instructions and availability
2. Complete listing paperwork
3. Pictures, measurements and floor plan
4. Hit the MLS (there is a right way and a wrong way)
4. Arrange showings
5. Open Houses
6. Receiving and negotiating offers
7. Coordinating the process, contract to close
Realtors are paid a percentage of the sales price by the seller. Most transactions involve a listing agent and a buyer agent. So if your house sells for $100,000 and the commission is 6%, then each side gets 3%. It is also important to note that while each side gets 3%, they then have to split the commission with the company.
Seller net is a term we use to discuss the bottom line for the seller, after commissions, legal fees and transfer taxes are paid. As an example, if you sold your house for $100,000, your estimated net after commissions, legal fees and transfer taxes would be around $93,500. Other expenses you might have are for repairs, unpaid property taxes, and balances on mortgages.
The most successful sellers listen to their Realtors advice on pricing, do a good job of getting the house ready to be on the market, keep it clean and show-ready, and readily agree to any showing opportunities.
I believe that the most important qualities in being a listing agent are:
--Skillful and comprehensive marketing
--Quality presentation of the home
--Diligence, care and follow up.
When I got into the real estate business in 2007, the market was going into the toilet. I spent the first four years scrambling for whatever I could get. I was also able to find success each of those years, and I think it had a last benefit. I learned that you have to take advantage of every opportunity, maximize your chance with every potential buyer, and do whatever it took to get the job done.
To upgrade or not to upgrade?
The most common question I get from sellers these days is, "should we do repairs and upgrades prior to putting the house on the market?"
I think it is always a wise move to make repairs. If you have some obvious flaw in your home, like rotted wood, a hole in the wall or damaged flooring, chances are likely that the buyer will ask for it to be repaired. So you might as well bite the bullet and fix it upfront. Obvious flaws that a buyer can see walking through will make him suspect there are other issues.
Upgrades is another issue, and I do not believe there is any right answer. A lot of it depends on the nature of the buyer that you cannot predict. Some buyers would rather get a house that needs some work and make their own style choices. Other buyers want a house that is ready to move into. Younger buyers tend to want the house ready to move into, they are less likely to want the hassle of any renovation.
My opinion is, it depends. If your kitchen countertop is old, but it looks ok, is functional and fits the kitchen, I'd leave it. If it has obvious flaws, makes the room feel old and needs updating to fit the rest of the house, it may be worth the investment.
Probably the best approach to take would be to walk around your house and make notes on what could be improved. List the upgrades in order of priority. Get estimates for making the upgrades, and make decisions based on bang for the buck. Remember that the most important rooms to most buyers are kitchen, living area, and master suite. Don't spend a lot of money on the third bedroom, that is not likely to cause a buyer decision.
If you are thinking of selling your house, give me a call for a free consultation. I will come to your house at a convenient time and give you a price, explain the process and show you how we can sell your home.
What to Expect When You List Your Home
Get Your Home's Market Value
Help for For Sale By Owners
Compare your home to the neighborhood
Why using a discount agent is a bad idea
Listing in the "off-season"