Last week I shared some behind the scenes secrets of today’s challenging real estate market involving home buyers. This week I thought I’d share some of the challenges and benefits that today’s home sellers face. “Challenges? Homes are selling way over asking price and in less than 48 hours? What could possibly be bad about that?” you ask. Well actually there are plenty of challenges so I’ll share a few of them with you.
The number one challenge that sellers face today is whether to even put their home on the market. Many of them tell me, “We’d like to sell our home, but we’re afraid our home will sell in 48 hours and we won’t have enough time to find the next home. We don’t want to be homeless.” I completely understand what they’re saying but no one ever said you have to close in 30 days. Because inventory is scarce, I’m promising our sellers that I will find a buyer that’s willing to close 60 to 90 days out from the contract date. This will give them plenty of time to find their next home. Honestly, almost all of the listings we have right now have closing dates that are anywhere from 45 days to 75 days out. In addition to that, no one can force you to sell your home with a closing date you aren’t happy with, even if it’s a full price offer. It’s always going to be your choice and you are in total control.
The second challenge sellers are concerned about is knowing they’re not leaving any extra money on the table. When prices are rising quickly, you have to know what you’re competing with at the time you put your home on the market. Yes, we typically price a home by looking at what has sold in the past six months, but it’s also important to know what you’re competing with today as well. If you’re the only home on the market in the entire Kansas City area, then I’m going to raise the asking price to one million dollars! Seriously though, there have been several times this year that within days of putting a client’s house on the market, I looked at the competition and suggested raising the price another $5,000. Setting the right price is important in any market, but in today’s strong seller’s market I don’t want to leave any money on the table either.
The third challenge is that most sellers believe they can ignore all repairs or upgrades and still sell at top dollar. Definitely not true, but I do see a lot of sellers try this. I could make a good case that in a strong seller’s market it’s even more important to make sure repairs or improvements are made. The reason is that there are about five qualified buyers for every home that hits the market in Kansas City. If you ignore repairs and assume that anyone will buy your home, you’ll end up sitting on the market and in 30 days be forced to lower your price $5,000 to $10,000. If you spend around $3,000 to make small repairs, repaint a room or two, and upgrade faucets and lights (just a few examples) you will see buyers compete for your home and drive the sales price up another $5,000 to $10,000.
Although there are clearly several challenges in this seller’s market, there are just as many benefits as well. The biggest benefit is that most homes are selling within a few days of hitting the market and given this situation, sellers don’t have to keep their homes immaculate for weeks or possibly even months at a time.
Another benefit is that today’s buyers are serious. They don’t want to ask for too much or waste time negotiating hard when they might lose their “dream home” to another buyer. Many of my listings have sold at or over the seller’s asking price, with the closing date that the seller wants, no closing costs, and sometimes the buyer even agrees to buy the home “as is” and not asked for any repairs. No one low-balls the seller anymore and no one expects to get “a deal” anymore either. It’s the very best time to sell.