As of September, the number of newly listed homes was down 20% from the year before and homes remain on the market for 32 days – 13 days more than the year before, according to analysis by Redfin.
But if you need another sign that the market is declining, ask the people who made it their profession: brokers.
In October, 37% of real estate agents struggled to pay the rent on their offices – a 10% increase from the previous month.
Sure, it’s a competitive career – the National Association of Realtors saw membership soar to an all-time high of 1.56 million in 2021 – up from 1.49 million the year before. But with available stock falling off a cliff and interest rates rising, many brokers are struggling.
So where is someone who wants to (or has to) sell their house now? Sure, you have to be a bit smarter, but there are still a few ways to give yourself an edge.
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Timing isn’t everything
If you’re considering selling your home, think of the process as a business transaction. You have a product – your home – that you sell to a customer. It is important to anticipate customer wants, needs and desires and market your product accordingly.
As the market has shifted, power has suddenly shifted to a potential buyer. If you’re selling your home to make a profit, you may want to reconsider your motives.
“What we forget and almost don’t want to think about is how challenging it will be to buy on the other side,” said Bradley Watson, a broker and investor based in Canada’s Greater Toronto Area.
If you’re considering selling a home, don’t let profit be your main driver. Trying to play the real estate market can lead to further disappointment and frustration, especially if you bought a new home before selling your current one.
Change your expectations
If you are selling your home, you need to take into account the changing attitudes towards home sales. While the demand is still there, brokers have witnessed a marked shift in the market.
They no longer see lines to view homes or extreme bidding wars on homes. Instead, there seems to be some stabilization.
“It’s just… adapting to change,” Watson notes. “In a balanced market you see little price growth. Where you may have seen your neighbor selling $100 or $200 [thousand] higher in some areas… you can’t expect that because that was the product of a very, very tight seller’s market, which we’re not in anymore.
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As the market cools down, homes are taking much longer to sell – and not reaching nearly the same prices they once did. Purchasing a new, more expensive home before selling your current home could result in you having to pay off two mortgages for a while or the financing of the new home falling through.
And keep in mind that problems can arise even if you think the sale is a foregone conclusion.
Watson suggests planning ahead what you’ll do to be able to close on your new home, even if you can’t sell your current home.
The value of a home inspection
When the market was hot, buyers didn’t have much room for negotiation.
“In the heat of the moment, we’re looking at at least five or 10 multiple offers and no conditions,” says Watson. “In the hottest areas, we saw financing conditions disappear. The home inspection requirements had all but disappeared.
“I think there [were] many properties with problems that have sold and buyers have simply accepted.
That dynamic is already shifting. But it also gives sellers the opportunity to use a home inspection to their advantage.
By having an inspection carried out before you put your house up for sale, including the report that potential buyers can view, you can establish a fixed asking price for your house. And because the buyer is not faced with any surprises, he has less room to negotiate the final price.
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This article provides information only and should not be taken as advice. It comes without any kind of warranty.