A health care analyst and his social worker wife plan to retire later this year. That’s why they’re constructing a small bungalow on family-owned land in Honolulu, where the analyst grew up. But looking forward, this California couple is stumped about what to do with their contemporary place in Los Angeles.
Their options for the L.A. property are several. They could sell as soon as the Hawaii place is done -- likely this summer -- or delay the sale until market conditions improve in California.
“We’re hoping that by waiting we could get a higher price. Our L.A. neighborhood is slow right now. Maybe that’s because buyers, who are limited by high mortgage rates and economic uncertainty, are waiting for the country to stabilize after the next presidential election,” the analyst says.
Fred Meyer, a longtime real estate broker and appraiser, doesn’t know the couple in this true story. But he advises owners who can afford to delay a home sale to seriously consider that course.
“When you’re weighing the pros and cons of selling now versus later, it’s great to gather data in support of your options,” says Meyer, who lists property near Harvard University.
While it’s true that appraisers are trained to calculate the value of a property, Meyer says active real estate agents are typically better at evaluating current market trends.
“Call in agents who are top sellers in your immediate area. At this early stage, tell them you’re not yet ready to sell but want their opinion. To encourage their objectivity, offer to pay them a couple hundred dollars for their help,” Meyer says.
For your meeting with the agents, ask them to bring key statistics on the health of your market. One set of data should track the number of available homes in your area and whether that number is expanding or shrinking. Another involves the number of days it takes to sell a place there.
“If the ‘days on market’ are shrinking, that’s a good sign for your area. If the opposite is true, you may wish to wait for an indefinite time until you list. In that case, you may choose to rent out your house while waiting for the ideal time to sell,” he says.
Here are a few other pointers for sellers:
-- Don’t count on major price increases.
Sid Davis, a real estate broker and author of “A Survival Guide to Selling a Home,” says that even in some exceptionally strong markets, demand has started to recede.
It’s not that would-be purchasers from the millennial generation are surrendering their homeownership dreams for good. Indeed, Davis believes most are as motivated to own as were their parents at the same stage of life. But some young adults are now exiting the market temporarily, if only to give themselves a break from the stress of home shopping during the red-hot pandemic-era period.
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.
-- Review an agent’s track record on pricing.
If you’ve made a firm decision to sell in the near-term, it’s important to price correctly from the beginning.
Do you live 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 try to hit the bull’s-eye from the beginning rather than letting your house become shopworn,” Davis says.
How can you judge whether an agent has a good 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,” Davis says.
-- Look to guidance from real estate pros in your neighborhood.
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.
“Would you automatically hire a relative to manage your retirement fund, or search for the best expert you can find? The same principle applies when selling your home,” he says.
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 restrict yourself to choosing agents who work in your area to determine the right one to list your house. Ask each to give you an honest evaluation of both the condition and current worth of your place. And question all the agents on how they came up with their pricing recommendations.
“You want to see the actual comparable sales used to support the agent’s recommendation. In a changing market, it’s especially important that these sales be very recent -- preferably for houses sold within the last month,” Davis says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)