By September, the number of newly listed homes was down 20% from a year earlier and homes are lingering on the market for 32 days, 13 days longer than the year before, according to analysis by Redfin .
But if you need another sign that the market is in decline, just ask the people who made it their business: real estate agents.
In October, 37% of real estate agents were struggling to pay rent for their offices, an increase of 10% from the previous month.
Admittedly, it’s a competitive career — the National Association of Realtors saw its membership hit an all-time high of 1.56 million in 2021 — up from 1.49 million the previous year. But with available inventory falling off a cliff and interest rates rising, many agents are floundering.
So where does that leave someone who wants (or needs to) sell their home right now? Sure, you need to be a little more savvy, but there are still a few ways to give yourself an edge.
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Timing isn’t everything
When thinking about selling your home, think of the process as a business transaction. You have a product—your home—that you’re selling to a customer. It is important to anticipate the wants, needs and desires of the customer and market your product accordingly.
Because the market has changed, the power has suddenly shifted into the hands of a potential buyer. If you are selling your home for a profit, you may want to reconsider your motives.
“What we forget and almost want not to think about is how hard it will be to buy on the other side,” says Bradley Watson, broker and investor in the Greater Toronto Area of Canada.
If you’re considering selling a home, don’t make profit your main motivation. 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 consider the changing attitude towards home sales. While the demand is still there, real estate agents have witnessed a distinct change in the market.
They no longer see queues to view homes or extreme bidding wars over homes. Instead, there seems to be some stabilization.
“It’s just…adapting to change,” Watson notes. “In a balanced market, you don’t see a lot of price growth. Where you may have seen your neighbor selling $100 or $200 [thousand] in some areas higher up…you can’t expect that because it was the product of a very, very tight seller’s market, which we’re not in anymore.
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With the cooling of the market, houses take much longer to sell and no longer fetch the same prices as before. Buying a new, more expensive home before selling yours could result in you having to take out two mortgages for a while or frustrate the financing of the new home.
And keep in mind that problems can arise even when you think the sale is closed.
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, that didn’t leave much room for buyers to negotiate.
“In the heat of the market, we’re looking for at least five or 10 multiple offers and no strings attached,” Watson says. “In the hottest areas, we found that the financing conditions had disappeared. Home inspection requirements had all but disappeared.
“I think that [were] lots of properties with issues that have been sold and buyers have just accepted it.
This dynamic has already begun to change. But it also gives sellers the ability to use a home inspection to their advantage.
Performing an inspection before you put your home up for sale and including the report for potential buyers allows you to establish a firm price for your home. And because there will be no surprises for the buyer, he has less room to negotiate the final price.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
