By now, everyone has heard hushed stories from starry-eyed sellers of just how quickly their modest homes recently sold—for way over asking price. Maybe this unprecedented seller’s market has you hoping you can cash in on your home, too.
We don’t blame you. But lest you presume listing today is a breeze, it’s time to brace yourself—or better yet, buckle up—for a whole new ride.
In the past, selling a home was a relatively mellow affair that required low-to-midlevel effort on your part and at least a few weeks or months to bear fruit.
Now, though, your home might be deluged with offers the very day it hits the multiple listing service, or MLS, and although homes are selling fast, this does not mean you can just kick back and watch the offers roll in.
If you’re looking to fetch the highest price possible and the best terms, it’s time to understand what you’re in for, and how it’s light years different from the way things used to be. Behold the new rules of selling a home today.
1. Old rule: You can look for a new home as you sell your old one
New rule: Come up with a solid game plan for where you’ll live before you list
Many sellers who are trying to take advantage of unprecedented sale prices think that they can sell their home and figure out the details later.
Unfortunately, this old-school mindset is a mistake, says Chase Michels, a real estate consultant with Compass in Downers Grove, IL. He recommends that you have a plan of action in mind before you put your home on the market.
“Now is a better time than ever to be a home seller,” he admits. “But you need to understand that after you sell a home near the top of the peak, you will need to find somewhere else to live. At that point, you will become a buyer, who will be competing against everyone else in one of the toughest markets that we have ever seen.”
In other words, it may take you a while to find the right home. Make sure you have somewhere to live while you wait, perhaps a rental, while you figure out your next move.
2. Old rule: Price your home high to drive offers higher
New rule: List below market value to reel ’em in first
Once you are ready to list your home, a big consideration is how to price it. While a real estate agent can help you determine how much your home is worth in the current market, it may be wise to resist the temptation to list higher in order to drive up the sale price.
“Pricing your home above market value can cause it to sit on the market. In today’s fast-paced industry, if your home is still on the market after a month, potential buyers will believe something is wrong with it,” explains Corey Tyner, real estate investor and founder of Buy Yo Dirt in Phoenix.
Instead, he suggests pricing the home at its fair market value or even a bit below in order to pique buyers’ interest.
“Listing a little below market value can work to your advantage by starting a bidding war that drives the price up even higher than [originally] intended,” he says.
3. Old rule: Make sure you have nice listing photos
New rule: Dazzle with aerial videos, 3D tours, and more
In the old days, marketing your home meant putting a few photos alongside the listing description in the MLS. Today, investing in home staging and professional photography is considered standard practice for marketing a listing online—and some buyers in this market are looking for even more.
“How your home appears online is one of the most important factors in getting the home sold,” says Jennifer Wehner, team leader of the Wehner Group brokered by eXp in Scottsdale, AZ. “This doesn’t just mean choosing an agent who invests in professional photography. It means investing in other kinds of media as well. Today’s homebuyers want to see floor plans, videos, twilight photos, 3D tours, aerial photos and videos, and so much more.”
Then, once they schedule a showing, buyers also want the home to exceed their expectations.
“The market is especially competitive for homes that are turnkey, meaning they need little to no work done once the buyer moves in,” says Garrett Derderian, director of market intelligence at Serhant in New York City.
“Many buyers do not want to undergo the difficulties of renovating, especially given how supply chain disruptions have increased the cost of goods and drastically extended the time it takes to complete a renovation. If you want top dollar, improving the home before listing will go a long way,” adds Derderian.
4. Old rule: Prepare for a few home showings a week
New rule: Brace for a nonstop onslaught that will leave you nearly homeless until it’s over
“Be ready to leave,” advises Tina Suter, a broker associate with House Real Estate in Sacramento, CA.
“In years past, when a seller put their house on the market, there would be a showing every other day or so, until they got an offer. Right now, sellers should be prepared for full days of back-to-back showings.”
Often, accommodating so many showings can be inconvenient for sellers and difficult for them to manage, which is why some real estate agents have taken to giving their clients some unconventional advice.
“We ask our sellers to plan to be away,” says Glen Whitten, a broker with Ohio Property Group in Ada, OH.
Whitten also notes that the whirlwind pace does not stop once you have offers on the table.
“In this market, you’re going to need to sort through multiple offers, offer deadlines, and escalation clauses,” he says.
This is where an experienced listing agent will go a long way.
“Sellers need a steady, seasoned hand,” he says. “You need someone you can rely on to guide you through this hurricane.”
5. Old rule: Take the highest-priced offer
New rule: Beware a purchase price that’s too good to be true
Finally, while the sale price is usually the first thing that sellers consider when looking at an offer, it shouldn’t be the only thing on your mind. After all, there are many factors that go into creating a worthwhile offer, and price is just one of them. If an offer sounds too good to be true, it often is.
“An offer that’s well over the list price is not always a good thing,” warns Carolyn Riley, a real estate agent with Real Broker in Raleigh, NC. “The market is so hot right now, that buyers are offering $200,000-plus over the listing price to have their offer accepted by the seller.”
But if this buyer needs a mortgage, “it’s also important to ask, ‘Will the home appraise for the offered amount?'” Riley says. “If not, you could find yourself reducing the sale price a few weeks before closing.”
Riley is referring to an appraisal gap, which occurs when the home’s appraised value is much less than what was offered by the buyer. However, she notes that appraisals are only one tactic that some buyers are using to renegotiate the sale price after their offer has been accepted.
Inspections are another. If, say, the inspection turns up some less than ideal mechanicals or other features, your buyers may demand a price reduction or threaten to walk away from the deal.
In her mind, if you want the surest bet, an offer with fewer contingencies is the way to go.
This means going for the offer that isn’t reliant on the buyers selling their current home or one in which you know the buyers aren’t going to nitpick every detail the inspection turns up.
You want the sale to move smoothly and swiftly, or else you can end up back at square one if the deal falls through.