When is the Best Time to Sell Your Home?
You may have heard many different opinions about when the best time to sell your home is. Spring? Summer? Fall? The fact is there are several factors that determine when it’s a good time to put your home on the market. Mainly, there are four criteria that are pretty solid cues that it may be time to sell:
- Low Inventory
- Low Interest Rates
- Rising Home Prices
- And Warm Weather
When Inventory is Low
During the height of the housing collapse, buyers had their pick of the litter with an overabundance of homes for sale all across the country. It’s when inventory is low that sellers have the advantage. If you are one of only a few people looking to sell in your area, you could find yourself smack dab in the middle of a bidding war!
If you have been thinking about selling your home, ask your agent about the inventory in your area. If housing supply is limited, now may be the right time for you to sell.
When Interest Rates are Low
A drop in interest rates often spurs on-the-fence buyers to finally make their move. If you’ve been thinking of moving up or downsizing, you may want to put your home on the market soon so you can start your search for a new one and take advantage of low interest rates.
Depending on the type of mortgage you take out, you could lock in a very low interest rate. That could mean paying less than 5% interest on your new mortgage over the term of your loan.
Wouldn’t it be great if you could knock off several thousand dollars in interest over the life of your loan?
When Home Prices are Rising
When home prices are rising, it is great news for sellers, bad news for buyers.Unfortunately,the housing market can be very unpredictable. Trying to time your home sale with rising home prices could prove tricky. An experienced agent can best advise you about whether or not now is the time to list your house while your home’s value is on the upswing.
When the Weather is Nice
This is one that you may have heard before – spring is the best time to sell your home. According to a study by Zillow, this is good advice. Generally, in the early spring in warmer climates homes sell faster and for an average of 2% more. In areas where the climate is colder, the peak time to sell is late spring, early summer.
Understanding Home Inspection
When you are close to closing the deal on your home, one of the contingencies that need to be met is the home inspection. In fact, some sellers get a pre-sale inspection report long before they start entertaining offers, as this gives them more time to make necessary improvements early.
In order to keep your home sale from being derailed, it is imperative that you understand the home inspection.
Who Does the Inspection?
Both parties can get an inspection done. It makes sense. As the seller, you want to know what problems could complicate your sale. Plus, you want to know what repairs need to be done so you can get the most value for your home.
The buyer wants to make sure that they are not putting all of their hard-earned dollars into a money pit. They are not going to rely on your inspector’s report alone, nor should they. When both parties do an inspection, it protects both sides.
What Happens When You Get a Bad Inspection Report?
First of all, don’t panic.
Inspectors are not perfect. They can get it wrong sometimes. The best approach to take to the entire home inspection process is to be flexible, willing to compromise, and get a second or even a third opinion if necessary.
Lean On a Pro
A qualified agent can help you better understand all of the ins and outs of the home inspection process.
What is a CMA and Why Do You Need One?
A Comparative Market Analysis or CMA is a report that agents use to help determine the proper value of your home. It helps them to price your home based on other similar properties in your area. It is not an appraisal. It does not require an official inspection to produce.
It is important to know how much your home is really worth because homes that are overpriced tend to linger on the market for months and months. When a home is listed for more than 90 days, buyers start to get suspicious about the reason why, which often produces a domino effect. If interest is low it will deter other prospective buyers from considering your property.
You could have a perfectly lovely home that would have attracted a stampede of prospective buyers if only it was priced right. That is why a CMA is so important. It should be done before you list your home.
How Does a CMA Help You?
Both buyers and sellers use CMAs to their benefit. Buyers often request one in order to determine whether or not your home is overpriced. Besides helping to ensure that your home is priced appropriately, the CMA can also help you avoid making unnecessary improvements before the sale.
Who Produces the CMA?
Again, the CMA is not an appraisal. It is not done by an appraiser, but by the seller’s agent. Your agent will assess the overall condition of your home compared to others in your neighborhood.
Using market data specific to your location, your agent will analyze current market trends, assess how much similar homes in your neighborhood are selling for, and will use that information to set your asking price. Because your agent has access to listings that are not publicly listed and up-to-date market information, they are perfectly suited to produce the CMA for you.
Therefore if you are planning to make any upgrades or improvements, you should let your agent know when they come to assess your home. They can use that information to make a much stronger assessment and will be able to make recommendations about which improvements are most beneficial to you.
The Importance of the Appraisal
One step that sellers often overlook in the home selling process is the appraisal. You can hypothetically list your home for any asking price you want (of course that’s not the best strategy), but mortgage lenders will only approve buyers for the amount of the appraisal – and if it falls short of the agreed upon sales price, this could result in the purchase contract getting cancelled.
Understanding this concept will help you to grasp the importance of the appraisal when selling a home. It will also help you to make the right choices when pricing your home, as you’ll want to use the same information the appraiser will – market data, recent sales, comparable homes on the market – to determine the market value of your home.
What Does an Appraisal Involve?
A home appraisal, at its essence, is the process of determining how much a home is worth. The appraisal in a home sale is required by the lender (the buyer pays for it) and it is an essential step in the financing approval process. It is used to determine the fair market value of your home.
Whatever value is determined by the appraiser is the value that the lender will use to determine the loan amount that the buyer will be approved for. A licensed appraiser covers the entire property, including the house itself, the land, and any additional structures on the property. Factors that affect the appraisal include:
- Square Footage
- Number of Bedrooms
- Number of Bathrooms
- School District
- Home Interior Features
- Age of Home
- Unique Features
- Property Views
- Improvements or Upgrades
- Swimming Pools and Landscaping
If you fail to make repairs or improvements to your property or fail to point out upgrades and improvements to the appraiser, it could result in a low appraisal. Prospective buyers will use a home inspector to take a look at the property as well. It’s important to note that inspections and appraisals are two different processes, conducted for different reasons.
Different Types of Appraisals
There are four basic types of appraisals. Though most appraisers will use a comparison analysis appraisal, it is still good to know the different types to make sure that they’ll be using the right approach:
- Comparison Analysis Appraisal – Used to assess home values based on local neighborhood sales and uses the most current data
- Walkthrough Appraisal – In-depth appraisal where pictures are taken and the home is appraised from top to bottom and inside and out
- “Drive-By” Appraisal – A quick snap analysis of the general value of the home, particularly noting the home exterior and surrounding area
Preparing for an Appraisal
Preparing for an appraisal is a lot like staging for an open house. In fact, if you approach the appraisal the same way, you can maximize the reported value of your home. Remember as well that most buyers are more interested in buying a move-in ready home.
An appraiser is different from an inspector. They are interested in the nuts and bolts of your home; its best features and how it compares to others.
- Clean the House
- Make Repairs and Upgrades
- Improve Curb Appeal
Too many sellers only realize the weight of the appraisal when it is too late. Don’t be caught off guard. Contact an agent to learn more about the importance of the appraisal and how to successfully navigate the process.
Home Selling FAQs
This is a quick rundown of the most common questions about home selling. Below you will find the answers to these questions to help you get a better understanding of what to expect.
How Do I Set My Asking Price?
First things first, you want to price your home as accurately as possible. That can be contrary to some advisors who suggest pricing high in a sellers’ market. Others suggest pricing low to spark more interest. It is a game to get into these types of price manipulations and someone inevitably loses. Avoid the risk altogether and set the price competitively for your particular area.
How Do I Attract House Hunters?
You will need to promote your home online in order to attract more house hunters. More than 90% of homebuyers begin their search online. They look at homes listed on national MLS portals or on local realtor sites. Some other things that you can do are:
- Spread the word via neighbors, co-workers, and friends
- Make appliances part of the deal
- Share your listing on social media
- Hire an agent with an excellent track record
Should I Renovate First?
To renovate or not to renovate is a question all sellers have. The answer is that it’s really subjective, but a few tips will help you decide.
- For the most part, minor improvements like paint or a new front door can do more to improve the value of your home than a complete renovation.
- Fix the HVAC, repair floors, and clean out the basement or garage if you want to make a big improvement.
How can I prepare my home?
Here’s how you can get started with sprucing things up:
- Clear out the clutter
- Cut the hedges
- Hose the driveway
- Plant fresh bulbs
- Wash ceiling fans and light fixtures
- Put away clothes and shoes
- Add lighting and accents
How Do I Negotiate the Best Price?
If you want to negotiate the best price for your home, use a professional agent. Using an agent will also ensure that you get the most out of online advertising. Make sure to ask about all of the services that your agent will provide throughout the home selling process.