getting ready to sell

When is the best time to sell your house?

by John Rice

I’m seeing a lot of buzz lately saying right around now is the best time of year to sell your house. Many realtors post these articles. I can’t blame them. We are always saying “Now” is a good time to do anything, lol.

I am in now way doubting the statistics. Numbers don’t like. The problem though is knowing what they mean.

Fact: There are more buyers out in the market in the spring. It’s always been this way so I don’t see the newsworthiness of it.

Fact: The likelihood of your house selling for top dollar is less dependent on when you list than it is on the condition of your house and how it fits in the market…..meaning, how do buyers rank your house compared to what is currently available to them in terms of condition, price, floor plan, lot and location.

I have sold plenty of houses in multiple offers the very first day on the market back in 2008-2010. That was when it was an extreme Buyer’s Market.

It is a simple formula really.

You do some prep work. Fix anything that is going to keep a buyer from saying yes to your house. You want them to leave their showing with a positive emotional response. If there is work to be done on your house, they leave with a logical response. They are thinking about what they need to do to your house and how much it is going to cost. If they even make an offer, it will be less since they are deducting the cost of those repairs. So, leave them with nothing to do but fall in love.

Price it right. I don’t mean use what zillow, a recent appraisal or an AVM says the house is worth. Do some real research. See what has recently sold in your neighborhood. See what is pending in your neighborhood. Pending sales, while you don’t know the actually sale price until it closes, can tell you what buyers are doing in real time.

The last step is the most important one. You see what other choices a buyer has maybe 15% below and 15% higher than the value of your house. Then you price your house so it is clearly one of their top choices. Why? Because after 19 years in this business, the one biggest thing I have learned is that every buyer wants the best house they can get for their budget. As long as you have one of those houses, it will sell quickly for top dollar in any market and in any time of the year.

Why do new listings get so much attention?

by John Rice

I have a listing that got lots of showings the first few days on the market. It is now only getting 1-2 showings a week.

I have a new buyer who I have shown everything that is currently on the market. They haven’t liked any of them enough to pull the trigger. We are now just looking at 1-2 houses a week.

Notice a similarity? Both are not getting a lot of activity. Why? The seller has exhausted all the buyers currently in the market. They are waiting for new buyers to enter the market. The buyer has exhausted everything currently on the market. They are waiting for new listings to hit the market. This is how it has always worked, but all the waiting is because there is still a significant shortage of listings.

When there is a new listing that drops on the market, every buyer in that price range will come out to see it. For buyers, it is tough because they are one of those people coming to see the listing as soon as it hits the market. They need to quickly decide if they want the house or not. There is often not a lot of time to sit on the fence when it is a new listing. For sellers, this is your best chance to get multiple offers. It can be easy for a seller to assume they will always get that much traffic. I have had sellers turn down an offer during this period because they think they can get a better one later. They think they will endlessly get 4-5 showings every day. Then it dries up after about day 3 or 4 on the market.

The market is constantly moving. It’s like the sun. You can’t see it move. You just look up in the sky and realize it isn’t in the same place it was the last time you looked. There are new listings and new buyer entering the market every day. (I do realize the sun doesn’t actually move, the earth does. Think of this analogy more as how we refer to the sun setting or rising.)

What to expect for the rest of 2023

by John Rice

In 2-3 months, you will be reading that sales have dropped significantly. The news media will have you believing the sky has fallen. They will compare the stats to the booming pandemic years and/or the best of times……as if that was normal. Headlines will read:

“Sales down 20% (compared to last month.)”

“Mortgage applications fell to lowest level (since 2022.)”

The reality will be that the market has just returned to normal, seasonal cycles.

I think sometimes we forget to look back far enough to see the bigger patterns. It probably doesn’t help that the media people are only following real estate long enough to write their article. It also doesn’t help that so many real estate agents haven’t been in the business long enough to see a balanced or even a bad market.

This is what a balanced market looks like: Some houses sell the first day on the market in multiple offers. Some houses don’t sell quickly and need one or more price reductions. March through August are peak sales months. After August the sales gradually slow down and start picking back up after the New Year.

So, for the rest of 2023, I think we will see fewer and fewer sales. Yes, the interest rates are high and that is what is returning us to a more balanced market. However, that is not the only reason we will see fewer sales. Part of it will be that we have returned to a more normal cycle of sales slowing down due to the time of year. I think prices will remain stable. We will see a whole lot of price reductions on listings that didn’t sell the first day on the market. This doesn’t mean that values are dropping. It just means the seller and/or their realtor were just too ambitious on the list price. We are returning to a market where buyers have some choices. When there are not 10 buyers fighting for ever single house, it means the loser houses that nobody wants will have to reduce the price to even attract one buyer.

When is the best time to sell?

by John Rice

I get asked this often.

If you’re really not into reading, I will go ahead and tell you. The best time to sell is when you are ready to put the house on the market.

Why wait? There are buyers out year round. Always have been. Always will be.

There are a few things to consider though.

The goal in any market is to get as many buyers as possible wanting your house. You do that by pricing it correctly and presenting it well. Usually the first few days on the market is your best shot of getting multiple offers. Once a listing grows stale, buyers are not afraid of losing it. They will pay top dollar for it if they are afraid somebody else will get it first. So, that means the first few days are the most critical to get right. Again, always has been. Always will be. That is why most realtors put their listings on the market on a Friday. Most people are off work on the weekend which means more showings. If your first weekend on the market is going to be a big UK home game, a big day for Keeneland, Mother’s Day or some other holiday when people will be traveling or have events with family/friends, it might be best to wait a week.

With so few houses for sale any more, you don’t have to worry as much about competing listings. I don’t worry about what time of the year is best and you shouldn’t either. If we ever get back to having a lot of inventory, my advice might change. Right now, any time is the best time.

The single most important thing when selling your house (or anything really)

by John Rice

I did it again.

I bought another car. For people who know me, this is par for the course. I am always falling in and out of love with cars and trading them like crazy.

If you’re wondering how me getting a new car is related to real estate, it is because of pricing.

The car I bought was not expensive. It is just a little Japanese sports car that is fun to drive. A new version came out during COVID and they have been in short supply ever since. You never see one on a lot. Most are sold before they arrive. Dealers are taking deposits on them and telling people they will call when the car arrives.

I went to a Volkswagon car show with my oldest son and his girlfriend last weekend. We had lunch on the way home. They asked about the deposit I had on another one of these cars at a local dealership. I replied that I was told it should arrive later this month. He then went on a mission of finding me one that was immediately available. He found one about 250 miles away in Indiana.

He called to confirm that it was in fact in stock. It was. I remember thinking to myself “Why is this car in stock, collecting dust on a dealer’s lot when every other one is pre-sold???”

Ahhhhhh……the price!

This dealer wanted $9000 over the MSRP price.

I told the salesperson that I was definitely interested in the car but there was no way I was taking it at $9000 over MSRP. He started telling me what a hot car it was and how many calls they get on it. I am totally sure all that is true. I’m a realtor, so I know how markets for things for sale work. This is a super hot car in high demand, but the reason it hasn’t sold is that it was overpriced.

Here are some truths about any market:

  1. You cannot sell something for more than it is worth.
  2. The whole market determines the value, not just the seller.
  3. A buyer is defined as ready, willing and able. (At $9k over list for a very affordable car, that price pushed the total cost well over budget for the target buyers, thus knocking out the “Able” part of those three requirements.)

Like real estate, you cannot sell the most gorgeous $500k house in a highly sought after neighborhood for $750k. If you try, it will sit on the market and you will reduce the price until those ready, willing and able buyers think it is worth it.

But isn’t the market still hot? Yes, it is. Prices are still going up in our area. That means you still, like always, have to price a house for something a buyer will pay. A hot market doesn’t mean you can sell it for more than it is worth. It just means it will sell quickly and many buyers will want it and be eager to pay top dollar….not more than top dollar. If you ever see a house that is sitting on the market and wonder why it hasn’t sold, literally 100% of the time it is due to price. It may have some odd feature or be in bad shape, but it will definitely sell when the asking price is in line with what Buyer’s think it is worth.

So what happened with the car? They came down to $6k over MSRP and I drove up and got it yesterday. I suspect had they priced it at that from the beginning, it would have immediately sold.