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This year has surprisingly seen a strong housing market. Homeowners make monthly payments to the bank and therefore you would think the pandemic recession and job losses would cause more property sellers.
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However, this was not the case. Low mortgage rates, low inventory supply and high house prices have resulted in an overabundance of buyers looking to acquire residential properties. Such an investment, whether personal or business, offers multiple benefits of long-term capital gains, tax benefits and monthly tenant cash flow.
Here are some tips for selling a home in today’s economy.
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Negotiate with confidence
So what does a seller’s market mean for people looking to put a household in the market? This means that they are facing a robust real estate industry and that by liquidating now, owners can get an attractive price from multiple bidders.
Negotiating well requires doing your homework. It’s important to stay cooperative (rather than antagonistic) and avoid making discussions too personal. However, you probably have leverage to push harder on the critical prices and conditions that matter most to your family.
If you sense a buyer’s urgency, this obviously works to your advantage, and even more so if there is a lot of auction going on. Does the interested party seem to like the property? Is this their “dream home”? Let the potential buyer know that there are many suitors in the house. Try to avoid concessions on inspection and closing fees, which can be as much as 7-8% of the value of the transaction.
Work with a real estate expert
As realtors know, local conditions dictate home inventory levels, availability, price, bargaining leverage and whether you can get any favorable terms. In a sellers market, demand exceeds supply and this gives sellers a negotiating advantage.
According to the National Association of Realtors, sales of existing homes in February 2020 were the strongest since 2007 at 5.77 million nationwide. In August, sales of existing homes climbed 2.4 percent, which marked three consecutive months of positive sales gains. The median sale price was up 11.4% year over year to $ 310,600.
I recently spoke with Brett Siegal, founder of Ruuster, a home buying management platform. He says having an expert agent on your side is worth his commission. Agents often have access to a home inventory that may not be available online, they help you determine your home buying needs and priorities, they bring their expertise and knowledge to your local market, and they serve as a Sherpa throughout the home buying process, which can be quite complicated, especially for first-time buyers.
A real estate sale is the biggest transaction most people will make in their lifetime. Do not rely on licenses issued by the state. Instead, hire an agent who has at least 50 transactions under his belt.
“A good agent can be great for helping to act as a buffer between you and sellers during negotiations and can be your best confidant in the process,” says Siegal. “For example, they may attend a home inspection and appraisal and advise you whether to negotiate seller credits or get a second appraisal if the appraised value isn’t what you expected – or if what you have received seems reasonable. “
Be prepared to walk away
Finally, know your starting point. Typically, this will be price. A buyer who wishes to avoid paying closing costs makes them less attractive. Don’t waste time with people giving you unrealistic offers, hoping they’ll come to their senses.
Show your property to other buyers who deserve your attention. Since there are more buyers than sellers in today’s market, find a buyer who doesn’t put any conditions on a deal except a willingness to make an attractive and possibly above-market offer. Naturally, most sellers like the less complicated offers.
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A transaction is voluntary and no one is forced to take a bad deal. Be prepared to walk away, recognizing that there are other buyers. In many situations, you have the upper hand. No deal is better than a regrettable one.