June Newsletter

With the short supply of housing stock, it's still a seller’s market in lower Fairfield County. So why don't more sellers put their houses on the market?

 

Interest rate plays a big part of that. A lot of sellers hold an interest rate half of what it is today at 7% and it is not transferable when you sell the house. It's a tough decision to give up such a low rate and buy a new home only to get a rate that is twice as high.

 

With housing stock at an all-time low, the search for a new home is very limited. Additionally, sellers are hesitant to put their houses on the market unless they have secured housing after they close. While their current home value has skyrocketed, they also have to pay a premium for a new home.

 

This is part of the cycle that has kept the housing and rental market in short supply.

 

Even though it is a seller’s market, it doesn't mean sellers should list their home way above the market value thinking any buyer will offer the asking price. On the contrary, the best way to sell a house in today’s market is to list the house at or a bit below market value. An experienced agent will use some active and sold comps in the neighborhood to establish a fair market value. Since there are buyers out there, the minute the house is listed on the market, buyers will schedule showings with their agents. If the house is overpriced, the house will sit on the market for months.   When the property is reasonably priced, it is very common that there will be multiple bids. Sellers then have the advantage of selecting the best offer with the best terms. Often we see a property that goes under contract for only a few days on the market and the contract price is significantly above the asking price. To entice the seller, some buyers might forgo any contingency to make their offer more attractive.

 

In a more balanced market, sellers would typically put a listing price higher than market value because then they can negotiate with any buyer whose offer is lower than the asking price. However, in today’s fast-paced market, buyers are aware of market conditions and know everything about the house online before they even set foot into the house. They will make a quick decision. Therefore, when they make an offer, they know they will have competition for a well-priced home. There will be no room for negotiation. As a seller, you have to prepare the house to show it at its best and have an exit plan. Things will happen quickly and there is no room for error. Once the initial traffic has slowed down, the seller will not have the leverage if there is only one offer on the table.

 

Market value is what a buyer is willing to pay for a property. That same property will be worth less when the buyers are gone. For a luxury property, the selling process might take longer since the buyer pool is much smaller. Proper pricing and presentation will always be key - stick to that, and you'll be on the fast track to selling your home.