If you are a home owner then chances are you have thought about whether or not to sell your home and take advantage of the high home values in this hot real estate market. What’s stopping you? Perhaps it’s the daunting feeling you got when you thought of it. “Where do I begin??”, ran through your head. Perhaps many more questions ran through your mind. Well, there are lots of people asking these same questions! Here are the answers to the top three questions sellers are asking themselves today:
The Top 3 questions home sellers are asking today
1. Should I sell my home first and then buy my replacement home? Or should I buy my replacement home contingent on selling? Or should I sell and then rent and then buy? Help!!! (That’s all part of the same question BTW)
In a hot real estate market many buyers are competing for the same homes. This creates multiple offer situations where prices are pushed up and contract terms are very favorable for the sellers. As a home buyer, if you are writing a contingent offer on a home you want to purchase, chances are low that your offer will be accepted. It’s not an impossible scenario, but you better have a lot of patience and tough skin to endure getting your offer rejected over and over until you luck out and find your perfect home (which is already tough to do when inventory is low!) and a seller willing to wait the week to two weeks for you to sell your house and hope YOUR buyer closes escrow so they can!
Well, if buying a home contingent on selling is not the way to go, then what about putting your home on the market and then trying to find your replacement property while you are in escrow on the sale of your current home? With housing inventory at historic lows then you will most likely end up having to settle for a house that doesn’t meet your wish list items.
The answer? Your best bet, if you have to sell your home in order to buy your next home, is to sell your home and put the proceeds of the sale of your home in the bank (or you can discuss with a financial planner or CPA other liquid options). Move into a rental in the area where you want to buy your home and search for your replacement property then. You will have better buying power then. Renting for potentially three to six months is the “cost” of selling a home in order to buy a home that checks all the boxes for you, in a market such as this one.
2. What should I do to prepare my home for sale in this hot market? It will sell itself right?
Wrong. Although there are many more buyers out there than sellers, buyers are not willing to buy homes that aren’t presentable. Buyers are making concessions like paying more for a house than they would’ve a couple years ago, or buying a home that might need a little updating, or removing their inspection contingencies. But you still need to present a good product to the market from day 1. The homes in my area (Chico, CA) that are selling with multiple offers and/or quick sales are homes in the median price range, that are clean, have great photos on the listing, and are in desirable neighborhoods. We are also seeing some gentrification happening in older, more run down neighborhoods. New buyers are coming in and taking pride in their home and neighborhoods are starting to turn around and home values are rising in those areas too because of it.
If you are thinking about selling your home then the best things you can do to prepare are:
-Deep clean EVERYTHING and declutter
-Hire a great realtor with a proven track record of selling homes in your area and who has good reviews from their clients. Then do
exactly what they tell you to do.
-Do the little repairs you’ve been putting off: fixing that broken handle, replace all the burned out lightbulbs, paint the front door,
put that cover plate on the outlet that never had one, have those carpet wrinkles stretched out by a carpet installer. All those
little things add up and buyers notice when there are a lot of deferred maintenance on a home.
3. I can push the selling price of my home up, right? Buyers will pay, right?
Wrong. The way that prices get pushed up is that a home that is for sale, that is priced at market value, receives multiple offers and those buyers bid up the price. Then, once that home closes escrow, the final sales price is then published and that becomes the new comp for homes like it. So you will want to price your home for what other homes in your area like it have actually sold for in the last 90 days. It’s important to get an objective opinion of which homes are actually comparables to your home. As a home owner, we often over-value our home and we aren’t looking at its value the same way a home buyer is looking at it. So hire a great realtor, with a proven track record of selling homes in your area that also have great reviews from their clients. Wait, I already said that earlier didn’t I?
Written by Kim Jacobi, of the Jacobi Team of Century 21 in Chico, CA. Kim and Emmett Jacobi are a husband-wife real estate team with over a decade of experience in the Chico and surrounding area. If you have more questions about selling your home, reach out and we can answer them for you so you can make the right decision for you and your household.
