For months, Daren Blomquist and his wife have hankered to buy a much bigger house in the same middle-income suburb where they now reside. The couple’s two young daughters are tired of sharing a bedroom. Plus, the family recently acquired a boisterous golden retriever.
But the couple’s quest to replace their 1,800-square-foot Spanish-style property with a larger one in the same school district has been frustrating. New listings are rare in their neck of the woods, and when a property they liked came on the market recently, it was pulled back by the sellers before Blomquist and his wife could make a bid.
“The owners said they’re waiting until spring 2019. By waiting, they think they’ll get a lot more money,” says Blomquist, a senior vice president at Attom Data Solutions (attomdata.com), which tracks real estate markets throughout the country.
Blomquist understands the sellers’ reasoning for wanting to delay. After all, home prices have risen in his area, as well as many popular neighborhoods, for more than six years.
Even so, he questions whether it’s wise for the sellers to wait.
“There’s no reason for gloom and doom. But at this point, the headwinds are against home price appreciation. Mortgage rates are going up, which is triggering a cooling off period for buyers,” Blomquist says.
Mary Gillach, a real estate broker who’s sold homes since 2001, says another factor slowing the market is the fatigue many would-be purchasers are experiencing at this point in the cycle, especially in inventory-tight communities.
“People who’ve lost homes to other bidders feel demoralized,” she says.
Lawrence Yun, chief economist for the National Association of Realtors (realtor.org), says low inventory levels are now starting to contribute to a gradual housing market slowdown.
“Price gains are going to decelerate,” he says.
Here are a few pointers for sellers:
-- Lower your expectations for major price jumps.
Sid Davis, a real estate broker and author of “A Survival Guide to Selling a Home,” says that even in some exceptionally strong real estate markets, demand has recently started to recede.
“For several years, buyers have faced stiff competition, especially at the starter-home level. Some people are just not comfortable with so much pressure,” Davis says.
All this is not to say that popular neighborhoods are bereft of wannabe purchasers. But smart sellers know that pricing right from the outset is always crucial to a successful sale.
“This isn’t the right time to be a greedy seller, if it ever was,” Davis says.
He says a listing agent who’s skilled in calculating the right price for a property is a valuable ally for sellers who want to hit the target when their home first goes up for sale.
“No matter the market, asking more than your home is really worth is a big mistake. Most buyers won’t even make an offer if they think you’re greedy,” Davis says.
-- Seek guidance from real estate pros in your immediate area.
When it comes time to sell a home, many owners think it’s wise to hire a trusted family member as their listing agent. But Davis cautions against choosing someone from your inner circle.
Even if your family member has a proven track record in real estate, choosing that individual as your agent could be a mistake.
“Your relatives probably won’t tell you if your place is a dump that needs to be decluttered or that it’s worth a lot less than you think,” Davis says.
He recommends you interview three agents who work in your area to determine the right one to sell your house. Ask each to give you a candid evaluation of both the condition and current worth of your place. Also question all three on how they came up with their pricing recommendations.
“You want to see the actual comparable sales used to support their recommendations. In a changing market, it’s especially important that these sales be very recent, preferably for houses sold within the last month,” Davis says.
-- Review the agent’s track record on pricing.
Are you planning to sell a home in an area where property values are now flat or slipping slightly? In that case, it’s unlikely you’ll receive your full asking price at the closing table. But if your property was marked correctly from the outset, you should still come quite close.
“The idea is to hit the bull’s-eye from the beginning rather than letting your house become shopworn,” Davis says.
How can you judge whether the agents you’re interviewing have a good track record on pricing? One way is to review a few key numbers on their past listings, such as “list-to-sale” statistics. Then compare the original asking price versus the sum ultimately received by the sellers.
If the agent is routinely making realistic recommendations, there should be little difference between the original list price and the final sale price.
“Don’t listen to any agent trying to flatter you into a ‘feel-good price’ that’s much higher than other pros are suggesting -- with the unspoken expectation of seeking a price cut later. That could lead to a very subpar sale,” Davis says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)