Real Estate Pros to Homeowners: Don't Wait to Sell
“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 are finding themselves with more negotiating power as buyer demand remains high and housing inventories are 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 is sparking 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—nearly one in three—of homes with a mortgage 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, told MarketWatch. “‘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 are struggling to find a home to move to. Potential sellers fear they’ll pay more for a comparable home, even if they’re downsizing. This may 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,” Sonia Figueroa, a real estate pro with EXP Realty in Chicago, told MarketWatch. “They’re not feeling rushed, and they’re not just going to jump into any house just 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 paying the 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.