Questions to consider when selling your home
This year in the Metro Denver market we have had a strong appreciation, where home prices are returning to their former levels. Many homeowners who were "underwater" with their mortgages are now finding they have equity. This is good news because it opens up the opportunity for homeowners to sell.
Is now a good time to sell?
In a word, yes! Due to the high demand for homes to purchase, sellers are enjoying a "seller's market". A seller's market is defined by the "days on market". When the days on market is 25 weeks or less (6.25 months), it is a seller's market. We go even further to define the seller's market as "Extreme Seller's Market" when the available inventory is from 0-12 weeks.
How do we calculate the number of weeks inventory?
This is a simple math calculation. The number of homes for sale (during the month) is divided by the number of homes sold (during the month)=weeks of inventory.
This is not a perfect calculation as these numbers fluctuates as home come on the market. But still, it gives us good guidance as to know if values are increasing or decreasing. This is important for a home owner to know when they are preparing to sell.
How do I determine the price?
As a Realtor, I can evaluate these numbers when preparing a pricing strategy for the home. Looking at comparable sold properties that happened in the past is one portion of pricing equation. One needs to evaluate the future home price based on demand. The value could be significantly more if there is a great demand for the home.
At the same time one needs to be very cautious about getting to aggressive and over-pricing the home. Over-pricing can be detrimental in the long run, causing the home to become "shop-worn" from being on the market too long. Buyers are weary of homes that don't sell quickly. They are concerned that there is "something" wrong with the property they might not be able to see.
How long will it take to sell my home?
Good question and one that I can only answer based on past history. I look at the "days on market" other homes in that price range and neighborhood have sold for and usually can give you a good estimate.
Right now in Metro Denver the days on market varies by price range. Of course it only makes sense that more houses sell in the "average" and below price range than above. If your home is in the average or below price range it stands to reason the timing for sale will be very similar.
There are extenuating factors that could change the days on market
- Accepting a contract with buyers who aren't qualified, committed, reasonable
Condition of your home has a bearing on who will buy it. If your home is in need of updating or major repairs, not everyone in the market is up to do that. The home will need to be priced right so buyers who want to do repairs can afford to purchase AND do the repairs. There are many companies that will offer to "buy your ugly house" but beware they are in the business to make a profit and the offer they give you will be a "wholesale price". I can guarantee I can find a buyer for more than they will pay you, including what you need after you pay me!
Location is really a tough one. You've probably hear the real estate mantra, location, location, location. Well if you are in a good location, you did well. If you purchased in a poor location or the location has gotten poor since you bought, you will just need to deal with it. That means compensating for it in price or providing irresistible terms to a buyer. There are many strategies to get you out of a bad location, it all depends on the situation.
Don't despair just remember "one man's house is another man's castle."
Contract fallout is a huge issue right now with our fast paced Metro Denver real estate market. Buyers are literally purchasing homes and then getting buyer's remorse and walking away from the contract. I think it's because the competition demands that they act before they have fully digested the big decision they are making. People really need to have choices. When that is taken away from them they become uncertain.
How do we prevent this? Working with the seller, I dig as deep as I can into the buyer's qualifications. Just because they wrote an offer doesn't necessarily mean they can and will perform. By researching their qualifications and asking more questions I hopefully can ferret out the unserious buyers. It means a lot to my sellers when they have the piece of mind the transaction will go as planned.
Free Guide: Things to Consider When Selling Your House.
Keeping Current Matters offers a wonderful resource guide for Home Owners with questions about selling their homes. You can click on the link below that will take you to my Evernote account where you can download/view the book at your leisure. If you have questions about the local market, please feel free to send me an email or call. I welcome your contact!
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