6 ways home sellers will need to shift their mindsets in 2019
Lately, sellers have lost their edge in many markets as slower home-price growth and home sales tip the scales more toward buyers' favor. Although home prices are still expected to rise this year, sellers aren't going to see the sharp increases as they have in recent years. They may not sell their homes as quickly either.
To get to the closing table successfully in the year ahead, sellers may need to adjust their expectations. Here are six key mindset shifts to make now to sell your home in 2019.
1. Don't expect multiple offers over asking price
Some sellers had buyers fighting over their homes in bidding wars, sometimes offering thousands of dollars over asking price to get the house. But those days are likely gone, says Danielle Hale, chief economist with Realtor.com.
"Buyers will still be in the market, but there will likely be more inventory and more choices for them," Hale says, adding that homes may take longer to sell in 2019 than a year ago. "It's going to be important to set realistic expectations if you're a seller. The market they face today is going to be different from last year, and there will be a little more inventory. That means sellers have to price their homes appropriately."
2. Rely on comps, not emotion, to set a realistic price
Speaking of pricing, sellers will need to leave emotions at the door and take a closer look at the comparable sales data when choosing an asking price.
Real estate agents like Ada Provenzano say education is critical to helping sellers grasp the difference between what they think their home is worth versus what buyers are actually paying for similar homes in the local area.
"Sometimes, sellers need to net a certain amount from the sale of their home to buy the next property so they set a high home price," says Provenzano, an agent with Keller Williams Realty in Tampa, Florida. "An agent will show you the comparables of the property that have sold and what's on the market to show you what homes are worth. In reality, you may want to net a higher price that isn't supported by the data, and you might need to wait to sell your home to get a better value."
3. Consider listing sooner rather than later
With mortgage rates falling to nine-month lows, buyers are jumping into the market early this year to take advantage of the savings. That means sellers, who might have waited until April or May to list their homes, may benefit from moving up their timeline, says Stacey Mattina, a real estate broker and owner of Konocti Realty in Lakeport, California.
"It's already busy in our market because there's so much talk about rates going up," Mattina says. "Sellers usually think they need to wait until spring to list, but they could miss out this year since buyers are showing strong interest now."
4. Don't overlook buyers with lower down payments
Sellers may assume buyers with a lower down payment are somehow less reliable than a buyer with a larger down payment. In reality, most homebuyers are putting less money down at the closing table these days, says Jennifer Beeston, vice president of mortgage lending with Guaranteed Rate.
The median down payment on a house is 13 percent for buyers overall, and 7 percent for first-time buyers, according to the National Association of Realtors' 2018 Profile of Home Buyers and Sellers.
"Some buyers have to put down more because it's the only way they'll qualify [for a mortgage]," Beeston says.
A low down payment doesn't mean a buyer has poor credit or won't be able to afford their mortgage payments, Beeston points out. Instead of focusing on the down payment, find out if the buyer's lender has a positive track record of closing loans on time and being responsive, Beeston says.
5. Get a home inspection before you list
A big wrench that gets thrown into a home sale is when a home inspection uncovers problems that buyers want addressed. Typically, buyers get a home inspection done within two weeks after a purchase agreement is signed. Waiting until then, however, can cause serious delays if multiple issues are found or, even worse, they back out of the deal because they had an inspection contingency.
Instead of waiting for nasty surprises, consider hiring a home inspector before you list your home for sale. You can then decide whether to fix any problems — or account for repairs in your asking price, Mattina says. If your home inspection reveals major issues, you'll have to disclose them to potential buyers. That transparency, though, can save everyone time and hassle.
"If you don't have an inspection ahead of time, you're waiting two weeks to see how it turns out," Mattina says. "Then you have to negotiate with the buyer and wait on repairs."
6. Catch buyers' attention online, or lose them
Some sellers may think they can do the absolute minimum to prep their homes and still get a flurry of interested buyers. That an be a huge mistake. Making your home look move-in ready, as well as curb appeal and professional, high-quality photos, are a must if you want your home to attract the right buyer, Provenzano says.
Mattina agrees, adding that buyers, many of whom start their search online, might swipe past your listing.
"It's more important than ever that a home looks move-in ready," Mattina says. "Make sure it's clean and all the honey-do list items are done before you list. You also want to work with a Realtor who will put the time and effort into making your home stand out in marketing materials, especially the listing description and photos. Most buyers will see your home online first, and you need to make a great first impression."