Here is a common question appraisers get from home sellers:
We are planning to sell our home and move back to the east coast. Should we wait until spring when the market, we are told, picks up again?
There are a couple of different perspectives to consider. First, you’re correct in stating that, historically, the market begins to surge once again at the beginning of spring. However, there will be more competition at that time as other property owners and their realtors have this same optimistic outlook of the spring market.
Is winter a good time to sell my house?
Winter, the slowest selling season of the year, is traditionally not an opportune time to put your home on the market. This year has certainly been an exception. It would appear that sales are up for the entire holiday period from just before Thanksgiving through the New Year. This cycle follows yet another strong year in sales that appears to have exceeded most segments of the housing sector – year over year. Inventories are down as demand has remained strong through the fall and holiday seasons. This shortage could prove advantageous to a seller like yourself, particularly, if your home’s pricing is below one half million dollars.
Historically speaking, the spring and fall seasons are the most active with lulls in the summer and fall/winter periods. These extremes have moderated this past calendar year.
Regardless of the time of year, when homeowners are motivated to sell, they put their homes on the market and nearly all eventually sell. However, there’s a lot less pain if the property sells in the first 90 days rather than after 6 or 8 months of market exposure.
Don’t overprice your home
One important caveat needs to be articulated. An ongoing phenomenon I have observed through four decades in real estate has to do with overpricing. Significantly overpriced properties eventually become “stale” in the marketplace. That is to say, too many months on the market due to overpricing results not only in price reductions over the MLS listing’s term but usually results in the seller becoming highly over motivated, which spawns a below market price.
The scenario goes something like this:
- The realtor’s CMA (comparable market analysis) indicates a sales price in the $500,000 to $535,000 range. The agent recommends a $529,000 asking price. Seller balks at this notion – stating they must have $575,000. The springtime offering is ideal timing. Two showings and no offer.
- After 120 days, seller reduces the asking price to $545,000 in time for the fall market. Three quick showings, 1 offer at $525,000. Seller counters for $540,000 – Buyer walks.
- After another 90 days, seller says “Let’s sell” to a new Realtor who recommends $525,000 for the now slower winter market. 60 days pass and the seller accepts a $510,000 offer. All parties on both sides Realtors and principals know that the sales price is below subject’s true value-in-exchange or “market value”. A new financing appraisal proves that out.
It’s important to note that, quite often, the highest price a property might command on the open market is the first tendered. To prevent your property from becoming too “stale” on the market consider, say, after six months of exposure – remove it for a month or two and then start fresh with a new reduced price.
Pricing your property properly for the onset will likely yield you the highest price in the shortest timeframe with the least amount of grief. If you can’t come to an agreement with your realtor, call an appraiser–NOT another Realtor.
As an aside for all new financing buyer deals, Fannie Mae, FHA, VA, etc. follow the same definition of “market value.” That being the “most probable” selling price as compared to the “highest” price a property might command.
An overpriced seller’s sparring with market participants for 6 to 8 months to achieve the highest price may be for naught when the new financing appraiser comes in at the most probable estimate.
Written by Dan Swan
Dan@SwanAppraisal.com
