There are a lot of articles and blogs on this question but NONE of them take into account what we believe really carries the most weight….YOU and your situation. Homeowners have a lot to consider regarding selling a house right now and it can feel overwhelming. We are going to break down some main points to help homeowners along the way. There are two categories to take into consideration are:
1. Your Situation
2. The Market
Nothing will have a greater impact on your choice to sell than your situation. So let’s talk about that first.
Do I need to sell my house fast?
There are many reasons why one would need or want to sell a house quickly. Below are a few.
- Relocation for a job
- Impending Foreclosure
- House needs too many repairs
- Job Loss
- Property taxes are too high
- Bad tenants in a rental property
- Unwanted inheritance
- Owe more than you think it’s worth
- Maybe you just want to cash out of the market entirely and live on a boat (we are with you on that one)
If any of these sound like your situation, selling quickly puts you in a more favorable situation as many of these circumstances can become the beginning of a financial nightmare.
What are my choices when selling my house?
- Sell your house yourself
- Selling to an investor
- List it on the market
Selling your house yourself is a good option, and a great way to avoid a lot of unnecessary fees, and maximize your profit potential. This is one of the slowest ways to get your house sold so make sure you have time to do the marketing for the house. There are plenty of great sites for that.
Selling to an investor who buys house for cash is the fastest and easiest way to sell your house. Because professional home buyers don’t use loans to buy houses like the traditional buyer, they can close in a matter of days. You will usually get offered a little less than you expected in these situations, because these investors pay for everything like closing costs and fees, ect., but you can often walk away with more than you would if you listed it after paying for repairs, and closings costs.
Listing is a great option if your house is fully updated and time is on your side. It offers the most potential for for selling at the highest price if there happens to be a great demand for your property. In listing a home, it’s important to budget in closing costs, appraisal cost, and agent commission (both buyer and seller agent) as well as staying abreast to the number of days houses just like yours are sitting on the market. You can expect this route to take 45-90 days to close (thanks to The Dodd-Frank Act) after you find your traditional buyer and pass the inspection period. When it comes to signing with an agent, be sure you are aware of the time period the agent owns the right to sell your house. If things don’t go well between you and an agent, they can still hold exclusive right to sell and take their fees from your profits in the end.
There are two main market considerations when considering if now is a good time to sell your house.
Is it a sellers market or a buyers market?
When considering the market we take a look at many things, but first we suggest looking at basic supply and demand. To keep it simple, supply, which is called Inventory, and demand, known as absorption rate are what you’ll want to focus on. High demand, low inventory = Sellers Market. High inventory, low demand = buyers market. (Most of the information you need to make these calculations can be found on Zillow, Trulia, or Redfin.)
Supply: Inventory is measured in months. The months of supply is the time it would take for all the current inventory to sell if it all sold at the current rate without new inventory coming on the market. To calculate this, take the number of houses currently for sale in your market divided by the average number of homes sold per month.
Demand: Absorption rate would be how fast those properties are being purchased in relation to how fast they are being listed. To calculate this, you’ll divide the number of houses sold in the last 12 months by the number of active listings today. Then divide that number by 12, the number of months in the year. This will give you how many months of inventory there are.
Typically fewer than 6 months of inventory is considered a sellers market, whereas greater than 6 months of inventory represents a buyers market
How much is my house worth in todays market?
The reason we ask “today’s” market is that the market can change from day to day. If you look at a graph of home values it is never a straight curve but always a bit of zig zag. What your house is worth today, can differ slightly or drastically over a short period of time.
Although it is a great way to get laughed at, DO NOT evaluate the value of your home using Zillow’s Zestimate. Zillow is a great website and tool for a lot of things, but not determining an accurate value of your house via the Zestimate tool. Zillow has been known to be up to 40% below or above actual value. The reason for this is that it’s algorithm is not taking into account the current condition of everyones home in the market, or the unique location, but merely the sold price for homes of a specific square footage in your general area. This can be problematic if your house has power lines over it, and your neighbors doesn’t. Or if your neighborhood sits near a bunch of luxury homes, or if you live on a block where you and two of your neighbors houses have been flipped, with all new hand scraped wood floors, granite countertops, new roofs, and HVAC units. Zestimate would say that that neighbor down the street with the house that hasn’t been updated since 1972, is worth as much as yours. NOPE! You and your neighbors sunk 50,000 dollars into your properties offsetting the algorithm that the Zestimate is not aware of.
The only way to get an accurate value of your house, is to look at what houses just like yours, inside and out, that have sold in the last 90 days.These are called comparables or comps.
To get really accurate comps you will need access to the Multiple Listings System. However, this can be pretty difficult, unless you have a valid real estate license. So the next best thing you can use is Zillow to look at past sales, but make sure the location and quality of the home matches yours. remember, doing this differs greatly from using the Zestimate. If you are wanting to sell your house fast, or determine whether you should list it, we have agents on staff who are happy to help determine what your house could sell for.
How fast can I sell my house?
Since we are asking the question, “Is NOW A Good Time To Sell My House”, that is what we will touch on first.
Investors can buy your house for cash, anywhere from two days, to whenever is comfortable to you. It really depends on the agreement you reach between you and the buyer.
If you are looking to list the house on the market with an agent, we suggest you run through this prep list to help you move quicker. Listed houses can sit on the market for hundreds of days, while buyers make constant repair demands, or if the house is in great shape, and in a great location, it can sell in just a few days. The lower you list the house for, the more likely you are to sell your home fast. But remember, as soon as you have a signed contract, you have to wait up to 45 days or more, to find out if that buyer can actually afford your house so just make sure time is on your side if you go the listing route.
As you can see, determining wether to sell your house now or waiting is a very personal choice. There is not one answer for all scenarios, but we hope we have provided some important material for consideration when weighing your options.