It’s vital to comprehend the present dynamics of the real estate market if you’re thinking of selling your house. Even while the market’s extreme volatility during the pandemic-related pressures may have subsided, there are still significant obstacles to overcome.
For starters, mortgage interest rates hit record highs last fall that hadn’t been seen in over 20 years. The average 30-year fixed mortgage rate was 6.59 percent as of mid-August, according to a Weekly poll of major national lenders, albeit they have retreated from the 8 percent barrier observed in October 2023. That comparatively high reality raises the cost of mortgage payments and deters many prospective buyers, which is definitely not ideal if you’re the one selling.
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To make matters worse, housing costs have surged dramatically. At $426,900, the national median selling price in June 2024 shattered all previous records and became the highest monthly median ever recorded by the National Association of Realtors. Although sellers usually benefit from high pricing, purchasers must be able to finance the purchase, which is becoming more difficult due to rising interest rates. Notwithstanding price trends, the country as a whole is still firmly in a seller’s market, with housing inventory remaining at a very low 4.1-month supply.
So, is it a smart idea to sell your property right now, given all these conflicting signals? To assist you in navigating the question, consider the following observations.
Is it time for me to sell my home?
Before listing your property for sale, there are a lot of crucial things to think about, both from a financial and lifestyle perspective. Even if the market is changing, if the general consensus is any indication, it could still be a good moment to sell. The July 2024 Home Purchase Sentiment Index from Fannie Mae indicates that over two thirds of respondents, or 65%, think now is a good time to sell.
According to Katie Severance, author of “The Brilliant Home Buyer” and Realtor at Douglas Elliman in Palm Beach, Florida, local market variables can have a significant impact on whether now is a good or poor time to sell. While some markets continue to struggle, others could be doing well. According to Severance, “selling now is the right thing to do in certain areas because prices are still climbing.” “In other markets, it could be better to hold off on selling until interest rates continue to decline, as this will encourage sales once more.”
What about commissions to Realtors?
When determining whether to sell now or wait, there are further commission fluctuations to take into account. The National Association of Realtors and other sizable brokerages settled a federal lawsuit last summer, which led to the creation of the new regulations.
It has long been customary for a house seller to cover the commission costs for both their buyer’s and their own real estate agents during a transaction. However, under the new regulations, the buyer’s agent cannot receive payment from the seller’s agent on the Multiple Listing Service (MLS), a popular real estate database that formerly listed the commission split for each property. It’s difficult to predict how everything will work out until the regulations are in place for some time, although it would definitely save the seller money if the buyer is in charge of paying their own agent. Make sure the parties to your contract are expressly stated as to who will pay what commission fees and in what amounts.
How would you handle a recession?
It’s uncertain if a recession is approaching or not. But it’s a question worth posing: Should you sell your home amid a downturn? or perhaps right before one?
The response genuinely depends on your unique situation. Broker Jade Lee-Duffy, headquartered in San Diego, advises selling now rather than waiting if you’re worried about a recession. Selling during a recession, however, can be advantageous if you’re trying to rent or downsize. This might reduce your overall expenses, and you could use the money saved up to invest, take a trip, or fund a retirement account.
Recessions often result in job losses and overall financial hardship, which can significantly reduce the number of people wanting to purchase a home. Prior to a recession, a greater number of purchasers will be eligible for a mortgage and be able to afford a property.
Selling advice for homes
Here are some actions you may take to obtain the greatest bargain if you decide that selling your property right away is the right decision for you.
Locate a reputable local agent: Professional real estate agents may provide vital advice and direction, especially in a hot or volatile home market. Spend some time interviewing many candidates in your region, and find out who your friends and family think would make good agents to work with. According to Jen Horner, a Realtor with Masters Utah Real Estate, “a Realtor can help you create a game plan to get your home organized and in shape to present it in the most favorable light.”
If repairs are necessary, take care of them first to get the greatest offer for your house. According to Horner, “Sellers need to realize that they only have one chance to make a first impression.” “Your Realtor can accompany you on a tour of the property and offer advice on how to get your house ready for sale.”
Declutter and arrange the interior: To help potential buyers perceive the areas clearly, you should also try to keep your property neat. She asserts, “Less is always more.” A room will appear larger the less things it contains. Take out any superfluous furniture and personal belongings. If cleaning up isn’t enough, you might want to hire a home stager. “The buyer can learn how to maximize the space with the aid of staging.”
Enhance curb appeal outside: Updating the curb appeal of your house before potential buyers see it is important since it plays a role in creating a positive first impression. This might involve painting the front door a new color or doing minor repairs like planting and sidewalks.
Another approach to marketing
Consider iBuyers and cash homebuying firms if you need to sell your house quickly and don’t have time for the drawn-out process of a regular sale.
An iBuyer usually submits an offer on a house within 24 to 48 hours; two of the largest are Opendoor and Offerpad. The full procedure may frequently be finished in a few weeks or less if you accept it. Cash buyers also enable you to sell your house very quickly—in as little as one week in certain cases—and they typically buy properties exactly as-is, so no renovations are necessary.
But before you move forward with either approach, you should be aware of one significant drawback: selling to these firms gives you speed and convenience, but at the expense of profit. Generally speaking, they make far lower offers for your house than you may receive from a conventional sale. Additionally, iBuyers could impose exorbitant fees, so before signing anything, make sure you read the fine print.