Real Estate Pros to Homeowners: Don’t Wait to Sell
High buyer demand and slim housing inventories mean homeowners ready to sell now have more negotiating power. But those who sell may also need to buy their next home.
NEW YORK – “A lot of people are missing the best market now by waiting,” Kris Lindahl, CEO and founder of Kris Lindahl Real Estate in the Minneapolis area, told MarketWatch.
Homeowners find themselves with more negotiating power as buyer demand remains high and housing inventories slim. The supply of homes for sale is at a record low of 1.9 months. A six-month supply is considered a healthy balance between sellers and buyers.
The high demand sparked home prices to surge. The median home price was $303,900 for an existing home in January – a 14% jump from the year prior, according to the National Association of Realtors®.
Homeowner equity has grown. Thirty percent of U.S. homes with a mortgage – nearly one in three – in the U.S. are now considered “equity-rich,” according to ATTOM Data Solutions, a real estate research firm. A home being equity rich means that the combined estimated amount of loans secured by the property is 50% or less of the estimated market value.
Homes are selling fast, too.
“At this point, I’m telling my sellers, ‘Pick a Saturday,’” Marc J. Jenkins, a real estate professional with Prime Property Partners in the Atlanta area says. “‘Give me four or six hours, and I’ll sell your house.’”
So what’s holding sellers back? They often have to buy as well and struggle to find a home to move to. And potential sellers fear they’ll pay more for a comparable home, even if they’re downsizing. This can leave sellers unsure of what to do, but there are ways around the stress.
“I would say buy first because this way they can take their time,” says Sonia Figueroa, a real estate pro with EXP Realty in Chicago. “They’re not feeling rushed, and they’re not just going to jump into any house because they need to hurry up and move out.”
However, a seller would need to get preapproved for a mortgage to buy their next home while still paying a mortgage on their current home. For some homeowners, that is not a financial option for them.
Others can list their homes and then accept an offer from a buyer who is willing to wait while they find a place to buy. Sellers have more negotiating power and often are able to ask for this extra time. Sellers also may be able to negotiate a rent-back agreement to allow them more time to shop for a home.
Source: “Thinking of Selling Your Home? Don’t Wait,” MarketWatch (March 1, 2021)
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