The housing market keeps sailing along. The only headwind
that could take it off course is the lack of inventory for sale. The National
Association of Realtors (NAR) reports that there were 410,000 fewer single-family
homes for sale this March than in March of 2020. The key to continued success
in the residential housing market is for more listings to come on the market.
However, many homeowners are concerned that selling their homes could be
challenging for several reasons.
Recently, Homes.com released the findings of a survey that
identified these concerns, as well as what it will take for homeowners to feel
comfortable selling their houses. Here are the four major homeowner concerns
and a quick explanation of what’s actually happening in the housing market
1. Homeowners don’t know if they’ll be able to secure
their next home before selling.
In negotiations, leverage is the power that one side may
have to influence the other side while moving closer to their negotiating
position. A party’s leverage is based on the ability to award benefits or
eliminate costs on the other side.
In today’s market, buyers have compelling reasons to
purchase a home now:
To own a home of their own
To buy before prices continue to appreciate
To secure a mortgage at a historically low rate,
while they last
These buyer needs give the seller tremendous leverage. Most
already realize this leverage enables the homeowner to sell at a good price.
However, this leverage may also be used to negotiate time to find their next
home. The homeowner could sell their home to the buyer at today’s price, which
will enable the purchaser to take advantage of current mortgage rates. In
return, the buyer might lease the house back to the seller for a pre-determined
length of time while the seller finds a new home or has one built.
This gives the buyer what they want while also giving the
seller what they need. It’s a true win-win negotiation.
2. Homeowners don’t know if their current home will sell
for the asking price or top market price.
This is the perfect time to maximize profits while selling a
house. NAR just released a study showing that bidding wars are at an all-time
high. The study reveals that when comparing the first quarter of last year to
the first quarter of this year, the number of offers on homes for sale doubled
from an average of 2.4 to 4.8 offers.
Whenever there’s a bidding war, the price of the item for
sale escalates. Bloomberg recently reported:
“For the first time ever, the average U.S. home is
selling for above its list price.”
If a seller is looking for a top-dollar sale, there’s no
better time to sell than right now.
3. Homeowners don’t know if they will get an offer
without their home requiring work or updates.
Again, leverage is the greatest strength a seller has in
this market. Due to the lack of homes for sale, many buyers are more willing to
take on home improvement projects themselves in order to get the home they’re
A recent post on whether or not to renovate before selling
“It may be wise to let future homeowners remodel the
bathroom or the kitchen to make design decisions that are best for their
specific taste and lifestyle. As a seller, your dollars and time might be
better spent working on small cosmetic updates, like refreshing some paint and
power washing the exterior. Instead of over-investing in your home with
upgrades that the buyers may change anyway, work with a real estate
professional to determine the key projects that will maximize your listing,
without overdoing it.”
If a seller is worried about doing work or updates on their
home, they must realize that today’s historically low inventory likely renders
these projects less critical to the sale of the house.
4. Homeowners don’t know if they can have a quick closing
When speed is important, there are two points sellers should
The time it takes to find a buyer for the home
The time it takes to close the transaction
In the latest Existing Home Sales Report, NAR explains:
“Properties typically remained on the market for 18 days
in March, down from 20 days in February and from 29 days in March 2020.
Eighty-three percent of the homes sold in March 2021 were on the market for
less than a month.”
Regarding the time it will take to close the transaction,
all-cash sales accounted for 23% of all home purchase transactions in March.
All-cash sales can usually be closed in thirty days.
If a mortgage is necessary, the most recent Origination
Insight Report from Ellie Mae shows:
“Time to close all loans decreased in March. The average
time to close a purchase fell to 51 days, down from 53 the month prior.”
If you’re looking for a quick closing process, there’s never
been a market in which the two-step process (finding a buyer and closing the
deal) has taken less time.
Selling your house can be daunting, especially in a
fast-paced market. However, the fact that we’re in such a strong sellers’
market clearly eliminates many common concerns. Let’s connect today so you can
learn more about the opportunities for homeowners who are ready to sell.