Selling your home in a shifting market involves a little more effort and strategizing than doing so in a highly overheated seller’s market. You have plenty of choices to make regarding home improvement, pre-sale inspections, disclosures, and pricing that will impact your end result.
In every market, even the white hot market, there are some houses or condos that do not sell within the first month. Many will require price changes and perhaps home improvements before a buyer will write an offer that a seller will accept. Most of the time, your best price will be gleaned if the property goes under contract in 2 weeks or less.
Right now we are in a transitional market, or a shifting market. We are coming down from the most extreme seller’s market I’ve seen in my career (which started in 1993). It’s still a great time to sell, but not so much as it was a few months ago when we hit the peak of the seller’s real estate market.
By the way, normally that peak each year is in late Spring, often in May. This year the peak was in March, and having it so early in the calendar year signals a change.
New to home selling? For general home selling info, please also see Selling Your Home in Silicon Valley – 9 FAQs
Selling your home in a shifting market: choices you have and strategies that work best, starting with fixes at the property
Home sale preparation still matters. But so does speed.
In an appreciating market, it makes sense to take time to improve one’s house to maximize the sales price.
In a flat market, or a cooling one, spending a lot of time and money on renovations to sell may not make as much sense, particularly when seasonally we know that prices are likely to come down a little. With interest rates poised to rise, I think we can expect that to be the case.
Silicon Valley home buyers do want properties that are functional, clean, and move in ready. Don’t go overboard since you may not get a return on investment if you overspend or if you take too long to prepare. If you are selling your home in a shifting market, you want to make sure that you don’t stall and end up in a falling market, which is always a possibility.
You have choices about what improvements to make, if any, and what pre-sale inspections you’ll pay for upfront, as well as where to position your home in terms of pricing.
Home fixes in a transitional market – move quickly and make it look move in ready
The best return when selling your home in a shifting market are those which are visually large spaces and those which can be done expediciously:
- paint (does not need to be all white, which can be too stark)
- floor covering (preferably not too many different types of floors close together)
- light fixtures
- deep cleaning, including windows and tracks
- basic landscaping – very basic, as in tanbark if the yard is dead – to make it clean looking, trim back bushes if they are covering any of the windows
- replacing anything non functional
- take care of health or safety issues
- moving out and staging
Many people will object to moving out and staging since it increases costs. The problem with staying home is that most of us don’t have model properties – they are cluttered, our furniture doesn’t look great, and possibly other complications such as odors from pets, cooking, incense, etc.
Pre-sale inspections and disclosures are more important than ever
Pre-sale inspections and a complete disclosure package where you have answered your disclosure questions thoroughly will contribute to making buyers feel more at ease about buying your home. Inspectors, like any other professional, are not all the same.
Certain companies have a reputation for glossing over defects, and they may be very inexpensive compared to more detailed inspectors. Most buyer agents are familiar with the inspection companies and their confidence level will also impact how well your home sells (or if it does). Get good inspectors who are well respected by the real estate community.
Some sellers rush through their disclosure questions or want to skirt issues. Don’t do it. If you check “no” to every (or most) question, it won’t look like thee truth. Most neighborhoods have noise and some pests. But be specific. If you state that your property has rodents, that’s not clear – do you mean squirrels in the yard or rats in the attic?
Selling your home in a shifting market: pricing considerations
There’s no one size fits all answer for pricing your home when the market is cooling. On this point you and your listing agent need to ferret out what is happening in your home’s price point and local market, possibly down to the subdivision level. Much of the info you’ll need will be gleaned by real estate colleagues sharing what’s going on with pending sales (those prices are not published until the home closes escrow). With my clients, I pick up the phone and call the listing agents of the pending homes. Most of them will graciously share at least some information.
Something to figure out is the trajectory of the market. Are prices cooling or just flattening? How many offers are presented when a home sells?
If prices are declining, you may want to price your home close to where you think next month’s price will be rather than where last month’s closed sales will be. It’s like throwing a ball in a game – you need to aim for your target, not where the ball is today.
Sellers, don’t be discouraged. The market is shifting but it’s still a good time to sell. We don’t know how far the cooling will go, so it’s imperative that if you want to sell, you don’t drag your feet or cut corners.