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If you’re a homeowner who was flirting with the sale anyway, you might feel like you’re living in a giant lottery ticket — and who could blame you?
After hitting a record high of nearly 17% in 2021, home prices have only continued their upward trend. In January, prices unexpectedly rose to $350,300 for the average home, a 15.4% jump from last January, according to Yahoo Finance. In mid-February, Fortune reported that home prices are up 27% since January 2020 and are expected to rise another 12% in 2022 — much higher than estimates from just a few months earlier.
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Somehow, prices are rising at a rate that used to be considered unsustainable, so is now still a good time to sell? GOBankingRates asked the experts.
Before you list your home, ask yourself why you want to sell it in the first place.
“Selling a home is both a personal and financial decision,” said Eric Hegwer, an Austin real estate agent. “Before you offer a sale, ask about your motivation.”
He asks all potential sellers the following three questions:
- Need more or less space?
- Has your job changed and you need to be closer?
- Do you have a lot of equity and want to get something for another purchase or investment?
If your answer to any of these questions is yes, and selling is a choice rather than a necessity, then Hegwer said, “I wouldn’t sell because I think the market will continue to rise for at least the next two years.”
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It’s hard to overstate how good it is for today’s sellers
It’s entirely possible that prices will go up and sellers who wait a few months will get even more for their home than they are now. But it’s also quite likely that today’s seller bonanza represents the market’s top level.
“There’s no better time to start selling a home than now,” said Bill Gassett, founder of Maximum Real Estate Exposure. “In my 35 years of selling real estate I have never seen a market that is more seller oriented. With extremely low inventories across the country, home bidding wars are the norm, not the exception. Almost every house is sold well above the asking price.”
Gassett gave just two examples from last week, when two homes he listed sold for more than $100,000 over the asking price.
Things are so good, high prices are just the beginning
When you sell, look beyond the asking price and make sure you take every possible ultimate advantage of the sale. In this climate, chances are you’ll get most of what you ask for.
“Your property will sell quickly, with multiple listings and above asking price in this current market,” said Todd Luong of RE/MAX DFW Associates. “There’s also a good chance the buyers won’t even ask you for very many repairs, and you’ll get all the contract terms you want, like rentback, valuation waiver, and more.”
Gassett experiences the same thing over and over again when he works in Massachusetts. “Many contracts remove common contingencies like funding and home inspections,” he said. “The seller is getting a free pass at the moment.”
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There is no single “housing market” in the United States. Trends vary significantly from place to place, but generally people fled America’s urban centers at the height of the pandemic, and as prices fell and the virus subsided, they came back — and that’s where prices are currently rising the highest and as fast as possible.
“If you live in a medium-sized city or metro area, you can probably sell your home for more than the asking price very quickly,” said Martin Orefice, CEO of Rent To Own Labs. “You will receive your choice of offers.”
If you’re on the verge of leaving a high-demand, high-priced home in a large metro area in favor of a cheaper, more sparsely populated area, a sale may make sense. The same goes if you are selling a second home or have another backup plan. Otherwise, the sale condemns you to become just another buyer in a market defined by too many people scraping and scraping for too few homes.
“The problem here is that most people who sell their house have to buy another one,” Orefice said. “If you’re a private homeowner looking to add, remember you’re not going to have a problem selling, but you’ll have a lot of problems buying. If you are a real estate investor or looking to retire to an apartment or assisted living facility, I would definitely sell.”
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It’s only a good time to sell when it’s a good time to sell
Whether buying or selling a home or refinancing a home, the question of timing can only be answered by the members of each household.
“If the house still works for an owner, they should stay,” said James McGrath, a New York real estate agent and co-founder of Yoreevo. “Selling a property involves a lot of costs and enormous inconveniences. So you need a good reason to go through the process. Unless the new home is going to be significantly different – size, type, location – it’s difficult to find a reason to sell it for monetary reasons.
McGrath added, “If you’re buying something else, you’re selling a house that’s priced up to buy another that’s also priced up.”
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