Throughout 2019, home sellers in most neighborhoods have been riding high due to rising prices and a shortage of available property. But economists are cautioning that outlook could change in the new year.
“Sellers in 2020 will contend with flattening price growth and slowing activity, requiring more patience and a thoughtful approach to pricing,” says George Ratiu, a senior economist at Realtor.com, a real estate listings website.
Still, Ratiu doesn’t anticipate a steep drop in demand for property in 2020 akin to what happened during the Great Recession just over a decade ago. What’s more, he expects that sales activity could stay robust in certain affordable communities that are popular with young, cash-tight buyers.
“Sellers of homes priced for entry-level buyers can expect the market to remain competitive and prices to stay firm,” Ratiu says.
No matter the market conditions they’ll face, those who hope to sell in 2020 can’t afford an attitude of complacency, says Eric Tyson, a consumer advocate and co-author of “House Selling for Dummies.”
“To achieve the best possible outcome for your sale, it’s tremendously important that you take a proactive approach. That means all the cosmetic upgrades and repairs your place needs should be done before it’s available for public showings,” Tyson says.
One option for savvy sellers is to arrange for a professional home inspection even before their listing hits the market. This approach is recommended by Dylan Chalk, a veteran inspector and author of “The Confident House Hunter.”
R. Dodge Woodson, author of multiple books on home repairs and remodeling, says many sellers are reluctant to go forward with pre-sale repairs because of the cost and inconvenience involved.
Still, he says it’s important to spend the time it takes to search for the right contractors for your repair work, whether that involves fixing a nonfunctional garage door or repairing a leaky roof.
Here are a few pointers for sellers:
-- Take a broad approach to identifying good contractors.
Woodson advises against using online advertising to hunt for home improvement contractors. A more reliable approach is to seek recommendations from friends, neighbors or work associates who’ve had experience with the contractors they’re suggesting.
“Ask everyone you know for names. Consider this a treasure hunt,” Woodson says.
Besides those in your immediate circle, Tyson says you may wish to garner contractors’ names through the real estate agent with whom you plan to list your home.
“Realtors can really be good sources because they have lots of interactions with contractors. They’ll hear complaints if a contractor does a lousy job,” Tyson says.
Also, contractors may be more attentive to your project if they know you might complain about their work to the agent, which could hurt their chances for repeat business.
“If an agent hears complaints about contractors, the agent might stop throwing them work. This fear gives them an incentive to work harder for you,” Tyson says.
-- Seek a number of estimates from contractors.
Woodson, who has worked much of his career as a licensed plumber and has also run his own home improvement company, strongly recommends that homeowners obtain five estimates for any job expected to cost more than $1,000.
Why five estimates? Because experience has taught Woodson that consumers need a range of bids to gain perspective on pricing.
“What you usually want is a contractor in the middle of the pack on price. You can throw away an estimate from anyone who comes in 25 percent or more above or below the others in the pack. The guy at the top is charging too much, and the one at the bottom is probably cutting corners,” he says.
-- Make sure the contractors you hire will perform as promised.
After you’ve narrowed the contractors’ field with a comparison of price estimates, you may think your next step is to ask any company you’re considering for references. But Woodson says this is usually a “pointless exercise.”
“You don’t know if that reference is really someone’s brother-in-law or maybe someone else the company hired to say good things about them,” he says.
Also, Woodson says it’s a mistake to rely on photos the contractor has sent you via email.
“How do you know that these pictures show the contractor’s real work? Even if they do, the photos could have been doctored,” Woodson says.
To get a better impression of a contractor’s work, ask to visit homes where the firm is now working or has recently completed jobs.
“Sure, someone from the company has to call clients to get their permission for you to come over. But even so, the company shouldn’t balk at letting you see their work. If they do, you’ve got to wonder what they’re hiding. This is a big red flag,” Woodson says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)