The number of new listings coming to market has been increasing for the last few weeks, signaling a possible break in the inventory logjam that has driven up prices and forced would-be buyers to up the ante.
Not everyone will be as lucky as the seller of a modest house outside of Washington, D.C., which recently drew 88 offers – 76 of them cash – even though it looked like it needed a lot of work. It was listed for $275,000, but sold for $460,000.
“I had no idea how the floodgates would open,” said agent Ellen Coleman of RE/MAX. “I knew we would receive multiple offers above list, but nowhere near this.”
More and more sellers are hoping for a similar windfall. That’s why they’re listing now, before the seller’s market runs out of steam, as it eventually will. But it’s not always as simple as sitting back and waiting for the horde of buyers to arrive with all the money they can muster.
For starters, every would-be seller has to ask themselves where they are going to live when the house is sold. If you plan to buy another house, you become, at least temporarily, just one more member of the pack of scrambling buyers.
“The very thing that makes it a good time to sell makes it a tough time to buy,” said NerdWallet’s housing guru, Holden Lewis.
Even though new listings jumped 40 percent for the week ending April 10, the number of active listings are still 53 percent lower than a year ago, according to Realtor.com. Consequently, competition is fierce.
Redfin said 64 percent of the offers its agents wrote for buyers faced competition in March. As a result, not only are 45 percent of houses selling above their listing prices, a record high, they are selling in just 21 days, a record low. Nearly 60 percent went under contract within two weeks – also a record.
Clean, Clean and Clean
Still, sellers can’t just sit back and expect the offers to come pouring in.
“Some people think all you have to do is stick a sign in the yard,” said Elizabeth Weintraub of Weintraub and Wallace in Sacramento, California. “It might be easier to sell in a seller’s market, but it takes a lot more than a sign.”
First, clean your place from top to bottom, and take care of those long-postponed projects. You may not need to make any expensive presale renovations, but the leaky faucets and sticky windows you’ve ignored could turn off buyers.
“My advice is always clean, clean and do more cleaning,” said Joan Cox of House to Home in Greenwood Village, Colorado.
You also might want to obtain a home inspection, for two reasons: One, it will alert you ahead of time to any issues that a buyer’s home inspector is likely to discover. And two, your report could give buyers some assurance that the place is in decent shape, should they decide to waive their right to their own inspection.
Next, get all the necessary papers in order. Beside the inspection report, you might need your homeowners association documents and any other disclosures required in your state.
Staging Pays Off
Now it’s time to get your house ready for showing. If your place doesn’t pass the “view” test, it may not sell as quickly or for as high a price, said Danielle Hale, chief economist at Realtor.com: “Buyers are still pretty choosy.”
Here, you might want to consider hiring a professional home stager to make your house as presentable as possible to the largest share of buyers. Agents generally concur that staging makes it easier for buyers to see a property as their own.
Moreover, according to a recent report from the National Association of Realtors, staging increased what buyers were willing to spend. Agents on both sides of deals said offers on staged houses tended to be between 1 percent and 5 percent higher compared to similar places that haven’t been staged. Staging also tends to decrease the amount of time a house is on the market.
If you don’t want to foot the bill for a stager, than at least declutter. Put away those distracting family photos; clear off your kitchen and bathroom counters so those rooms look, well, more roomy. Get rid of all the ancient clothing hanging in your closets so they appear larger. Dump any excess furniture, and do whatever else is needed to make the house inviting.
Finally, set a reasonable price. Since housing prices are marching higher almost every day, some sellers think they can price above market – way above market, in some cases – and wait for buyers to knock down their doors offering even more. But you can get more with honey than vinegar.
In other words, it’s better to price your house just below market. That way, you should attract more attention and create more competition – which is what leads to more showings and more offers at higher and higher prices.
Only after you do all this can you sit back and wait for the bids to come rolling in.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at firstname.lastname@example.org.