The Federal Reserve cut interest rates for the first time since the recession. Will mortgage rates dip further?
Don’t Even Think About Listing ‘Til You Answer These Questions!
There are a ton of issues Sellers need to consider before sticking that for-sale sign in their yard. Here are 10 questions (with answers) that Sellers should know…
1. What level of attention and expertise do you need from a listing agent?
Some Sellers want a consultant who provides real estate expertise and backs off while sellers make final decisions and hire vendors to get the property in what they consider to be listing condition.
Other Sellers have mentally moved on and want the listing agent to do everything but write the checks.
Just as agents need to determine what level of service they’re happiest providing, Sellers need to decide exactly what services they expect their listing agent to provide and make those expectations clear up front.
2. What market-specific information do you have or have a plan to acquire?
To keep a home from sitting on the market, timing the sale to coincide with months of greatest buyer activity is smart. Prime selling season can vary from city to city, region to region and state to state.
Only an experienced, local real estate agent can guide you on the best market timing for your property. Spring might be optimum to put properties on the market in general, but some markets — like ours in Santa Fe — are also lively from Labor Day through Halloween.
While that market cools with the weather, ski resort sales heat up when the snow falls.
3. Do you know who your likely buyer will be?
An agent who sells a lot of properties similar to yours is apt to have a better feel for which properties appeal to specific groups of buyers, which means they get snapped up fast while others linger on the market.
What property condition and features do your probable buyers demand before they make an offer?
If you don’t know what appeals to whom and aren’t ready to interview agents, plan to spend your weekends visiting open houses similar to yours in what you think will be your broad price range. Then, pay attention to who attends the open house, as well as what the house looks like.
4. Do you understand that today’s Buyers expect homes to look like properties they’ve seen on HGTV?
What that means in real life is staging a home to sell is no longer optional in most markets. Do not think that watching HGTV qualifies you to stage your own home in a way that hits the right buttons with buyers.
Also, do not think that because you’re an “artist” or you studied interior design in college that you understand how good stagers merchandise a house.
You just don’t. You need professional help with this every bit as much as you need a plumber to replace the kitchen sink. This is not a DIY opportunity!
5. Are you aware that in the wake of the housing crisis of a decade ago, mortgage lending standards have changed dramatically?
Is financing readily available for your property? If not, Sellers — or their agents — need to get financing options nailed down and addressed — to the extent possible — any issues that might affect whether buyers can find a lender to offer a mortgage on specific properties.
6. Do you know how to price your property?
For starters, get off the computer. Real estate website “estimates” are calculated mathematically. Algorithms simply cannot take into consideration which properties are in a sought-after neighborhood and which, although they might be mere blocks away, are not.
So, while you’re spending weekends visiting properties that resemble yours, pay attention to prices on homes in different neighborhoods.
Factor in property condition versus buyer expectations. Buyers bid on properties based on appearance and how the space will work for them. They will pitch fits if anything much is wrong with the structure or mechanical systems. But sound systems don’t sell houses. Cosmetics do.
Plan to list at a reduced price if your property or neighborhood is affected by significant negative factors that are outside your control. That would include things like your neighbor’s new hobby raising peacocks, the lawsuit filed against your homeowners association (which means banks have stopped lending there) or your home’s location in an area undergoing a five-year utility undergrounding program, which shuts down streets Monday-Friday. Uncontrollable variables are crazy-making. But, by definition, they are not controllable. So, deal.
Mortgage interest rates affect pricing, too. When interest rates go up, the number of buyers at entry levels dwindles. And that affects home prices from the bottom of the market up.
7. Do you know what a realistic sales timeline is in your market for properties similar to yours?
Depending on its current condition, count on spending two weeks to two months to get your property in shape before it goes on market.
If you haven’t done anything to keep the property updated, be aware that buyers expect to pay much less for properties they must immediately go to work on. And some buyers won’t touch them at all.
So, if you’re thinking of selling, getting home and/or pest inspections upfront can save you a lot of anguish and prep time.
Staging and professional photography adds another week to the timeline, sometimes more if the weather isn’t cooperative, as many markets experienced this winter and well into spring.
The first week to 10 days after a property goes on the market is dominated by listing agency office tours, broker caravans and public open houses. So you’ll spend more time out of your house than in it.
Once that frenzy has passed, unless you’ve moved out, you’ll be living in a staged home and vacating it for showings — along with other family members and pets. This period is, hopefully, short. Even then, it will feel like an eternity.
Once the property is in contract, you will generally have another 30-45 days to get packed up and move out.
The good news is, during that time, you won’t have to endure many additional showings. Of course, inspectors will be examining every crevice of your home for the first couple of weeks. But, they’re not much swayed by staging, although a home that’s a total wreck doesn’t usually earn high marks.
8. What’s next?
Now is not the time to go all “leap and the net will appear.” You need to know where that net is going to be.
At least, out our way, the housing shortage is real, especially for those vacating homes who plan to rent. So, it’s prudent to know what your next move is.
9. Do you know what you don’t know?
No. You don’t. Good agents in your area, however, do know what you do not. So, if you’re even thinking about selling, start looking for the best agent for you immediately. Agents like long lead-times and are happy to talk to you early in the selling process.
10. Have you ever heard the expression ‘you get what you pay for’?
You should probably keep that in mind when the siren song of the cut-rate broker falls on your eager ear. If you don’t know what you don’t know, I’m here to tell you the biggest thing you don’t know is how much a cut-rate broker can actually cost you.
But maybe you need to find out for yourself.