By Erin Flaherty (realtor.com)
As a real estate agent in upstate New York, I can say with confidence that home sellers are in a great mood these days. And who can blame them? In this seller’s market where homes go fast and for top dollar, many sellers are excited to cash in and make a killing.
In many cases, they’ll succeed—yet this wild exuberance can also go overboard. Such bullish optimism could result in an uncomfortable collision with reality.
One of my sellers, for instance, had an unusual notion about what privacy meant when he insisted his home, which abuts another lot, was a secluded getaway. Others were certain their home had doubled in value since they’d bought it, or that desperate buyers wouldn’t care about that very dead tree in the front yard.
I have witnessed, as have my colleagues, many of these “wake-up calls” for sellers. And, in the hopes of helping other sellers avoid this uncomfortable collision with reality, I thought it would help to highlight some common expectations that you might want to rein in before listing your place.
1. You will sell in 3 days
Markets across the United States are facing a shortage of homes available for sale. As a result, it’s not uncommon for homes to sell after a few days or weeks on the market. However, a number of factors must come into play.
Real estate agents typically see this scenario only when a home is in a great location, is in turnkey condition, and is listed at an area’s median price point. (The national median is about $380,000.) Houses that require extensive renovation, are listed in a higher price range (read: less competition), or have quirky features may linger on the market.
2. You can price your home sky-high
Your home may be your pride and joy, but beauty is in the eye of the beholder. Many sellers tempted by the strong seller’s market may ignore their real estate agent’s advice, and insist upon an unrealistic number just to see if the market will bear it.
“One of the biggest mistakes sellers can make is going with aspirational pricing just because it is a seller’s market,” says Jeremy Bolger, a licensed real estate salesperson with Brown Harris Stevens in New York City. “We have seen many deals get multiple offers and go at or over ask, but they almost always stem from buyers sensing some form of value. And if there is no perceived value, buyers will often stay on the sidelines, even with limited inventory.”
3. You don’t need to make repairs or upgrades
Plenty of investors are willing to snap up fixer-uppers these days, but the average Joe Buyer is not in the mood to renovate.
“If the seller has a place that needs touch-up or decorative work, it’s usually a good idea to do it ahead of listing,” Bolger advises. “Construction and renovation costs are up sharply with all the supply chain issues. Buyers can be wary of purchasing a place that they will have to do work on, especially since the money spent there needs to be fully out of pocket versus buying a move-in-ready product and having everything rolled into the mortgage.”
You certainly might avoid major renovations before putting your home on the market, but simple updates such as painting the interior walls and switching out the hardware on your cabinets and drawers can go a long way in landing you a buyer fast.
4. You can sell your home as is
During the past few years, “as is” has emerged as a term sellers use to indicate that any and all major and minor repairs found during a home inspection will not be addressed and/or negotiated under any circumstances.
Here’s the problem with this cavalier attitude: In this hypercompetitive market, buyers are painfully aware that they can’t be picky, but that doesn’t mean they have zero standards. And let’s be honest: No matter the competition, many buyers still desire a turnkey home that won’t require a ton of work to fix up.
The term “as is” can also be a red flag to buyers, as it suggests the house may have underlying issues. If there are known issues, such as a structural problem or a boiler that needs to be replaced, it’s better to disclose them upfront so all parties are aware. The fear of the unknown could keep buyers from making an offer.
Additionally, when it comes to real estate, everything is negotiable. If a home lingers on the market or fails to ignite a bidding war, a seller might want to reconsider that “as is” condition of sale.
5. You don’t need a real estate agent
Perhaps you might have experience flipping some homes, or your law degree gives you the assurance to handle such a major transaction on your own. Why not post your home on real estate sites, sell it yourself, and avoid paying a commission, you might be wondering.
The reality is way more difficult than what you’re imagining. You’ll need to produce high-quality photos of your home (smart phone pics aren’t going to make the grade); respond to inquiries; and schedule showings. And even after all that effort, you won’t have access to list your home on the professional multiple listing service— which means thousands of buyer’s agents won’t be sharing it with their clients.
You’ll most likely end up leaving money on the table. It actually pays to work with an expert when it comes to marketing and pricing your home.
Karim Alaeddine, principal broker at Living Room Realty in Portland, OR, breaks it down: “Real estate agents that are busy have the pulse, know when rates or seasonal shifts or weather patterns or inventory flow are changing the tides, and adjust accordingly.”
6. Post-sale, you can easily buy something else
Yes, you’ve sold your house, but where will you go?
After they make a sweet profit on the sale of their home, many sellers assume they can easily buy a new home with the windfall. But not so fast.
If your post-sale plans involve buying a new house, whether you’re upsizing or downsizing, you’ll find yourself in the same pool of buyers competing for homes. A real estate agent can help you through the process of selling your old home and buying a new one, so you won’t be left in a lurch.