Getting the most money from your home sale might be the biggest challenge for sellers in 2020. HomeLight, a company known for matching homeowners and prospective buyers with thousands of America’s best agents, performed a Q4 2019 survey to take a look at what agents see as the largest hurdles sellers will face. Five hundred agents in the hottest U.S. markets weighed in to share their insights. Here’s what HomeLight found.
Seller’s market cooling
Most of the country is still seeing a seller’s market, but according to HomeLight, agents are reporting a shift toward a balanced market. If it slips over into a buyer’s market, sellers won’t have the advantage of there not being many options to choose from. Low inventory drives buyers to pay higher prices, which will no longer be a factor if the market becomes balanced.
Thought the inventory problems of 2018 were done? So did we as the market got 465,000 new listings in 2018. But then 2019 came, and with it, labor and material barriers — think tariff wars — that stomped any hopes. Both existing homes not meeting the demand of potential homebuyers and baby boomers deciding to age in place rather than downsize add to low inventory woes.
With fewer options, buyers are more likely to stay on the fence and rent until conditions improve, which means that fewer buyers will compete for the few homes on the market.
HomeLight research shows that 60 percent of agents reported seeing a decline in bidding wars in their area, which means less fierce competition driving up home sale prices.
Redfin had similar findings. Bidding wars on the Redfin site reached a 10-year low in October with only 10 percent of listings on the site facing a bidding war. Compared to Redfin’s previous year with 39 percent that had bidding wars, and you’ll see a steep decline.
In addition to the options that have been around for awhile, such as for-sale-by-owner and selling with a traditional agent, but now there’s a third option entering markets all over the country: iBuyers.
Fairly new to the real estate game, iBuyers offer homesellers certainty in the form of an instant offer on your home.
Typically the offer comes in lower than market value, and though you don’t pay agent commission with this model, there are fees attached that vary by company. Companies such as Zillow, Redfin, Offerpad and Opendoor all have iBuying options, and many traditional brokerages are starting to offer them as well, such as Keller Williams and Realogy.
The Florida Realtors have complied a “State of the iBuyer footprint” to help you be informed.
Typically, with iBuyers, sellers get less than they would if they put their home on the market and let the market work out the sale price. If priced right, buyers will likely have to come with competitive offers, allowing sellers to walk away with more money in their pockets.
Of the 500 top agents surveyed by HomeLight, a little more than half believe the tendency to overprice will be the biggest challenge for their seller clients to overcome.
As prices level off or even decline in some areas, sellers will need to be hyper-aware of their market’s conditions and how those conditions impact pricing strategy. Overpricing tends to lead to price reductions (sometimes several times), receiving low-ball offers and sitting on the market for longer periods of time. Sitting on the market means months of extra costs.
The easiest way to overcome this obstacle is to find an experienced top agent in your area to help properly prepare the home for sale, strategize a price that will garner solid offers and handle the heavy lifting and negotiations along the way.