Things to know when selling in a hot market.

Although selling in a hot market is great, it still introduces new challenges. Here is a little overview of some key points to focus on when selling.

Pricing

Some agents like to shoot for the stars and list extremely high. Sometimes they get it, but what they do not get is much of a bidding war. Buyers are willing to pay high prices right now, but they are still chased away by homes that are way overpriced.

We have had huge success with listing at what we think is an appropriate and realistic price. Because of the market demand, we often end up with bidding wars in which prices are pushed up over asking. So if you want to maximize price, list low enough to allow for a bidding war and let the hot market play out how it will.

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Renovations

With scarce inventory, buyers don't have a lot of options. In the past, renovating your kitchen, bathrooms, floors, and so on would bring back multiple times their cost. Today, we are seeing an increase in buyers who are willing to make updates after purchasing a house.

If your home is particularly outdated, it is still usually a good idea to make some upgrades. If your home is only moderately outdated, but still in good shape, you may just want to save the money and not do the renovations.

Cash buyers

When selecting an offer, consider the buyer’s financing. Cash buyers are the simplest, but keep in mind that some cash buyers will be waiting until they sell their current home to get the cash. This can add a lot of time to your closing time frame and will be a tradeoff that is usually not worth it.

Buyers with financing

If the buyer is getting financing, the appraisal is usually our biggest concern. It is pretty common in a hot market that a home doesn't appraise for the sales price. In this circumstance, the buyer would have to put up the cash difference between the appraised price and their loan amount.

To simplify, if the sales price were $420k and the appraised value was $400k, the buyer would need an additional $20k cash to close. For buyers who are already stretched on their down payment, it may not be possible to pay over appraisal.

The key takeaways here are to be aware of appraisal contingencies and to have a plan for an appraisal that comes in short.

Before you sell your home, get a game plan to maximize price and minimize stress. Get a J&J agent. Call us today or fill out the form here to get in touch.