The uncertainty, unpredictability, and unreliability of 2020 have changed the economy and the housing market drastically. If you are considering selling your house, there are 3 big obstacles that you are facing. This article will walk you through how to overcome them.
As with all things in 2020, the biggest obstacle to selling your house is COVID-19. With some cities open and others still in lockdown, it is tough to know how the economy is doing, particularly the real estate sector.
How do you sell your house during COVID-19? You need to take advantage of the lack of competition and set your house up for success! Like before, staging is essential, even more so now that you might be doing 3D or virtual walkthroughs instead of open houses. While most prospective buyers will still want to do an in-person viewing, you should take advantage of technology to get more eyes on your property. For 3D or virtual walk-throughs, the keyword is: declutter! Potential buyers need to picture themselves living in your home, which is why you need to create an inviting and overall neutral atmosphere. While you can have a few family photos or cards on the fridge, beware that personal items send a message and that you are sending the right one. It is just as important that your house is the cleanest it has ever been for the photographs and the videos. If possible, hire professionals to clean the hard-to-clean areas, like rugs and carpets. It’s these small touches that change the way your house is perceived, and in the end, the price you are offered.
Real Estate Home Seller Advice with Face Masks During COVID
2. Low Supply, High Demand
After you sell your home, where will you live? For all of the same reasons that it is a sellers’ market, it is also a difficult time to buy. To be a competitive buyer, you need to get your finances in order and be pre-approved for a loan. A pre-approval letter puts you in the fast lane of the house buying process, as it proves that you have the means to purchase the house you want. So, once you find the right property, you need to jump on it quickly. Remember that you are looking for a house to be a home, not to be perfect. If it meets most of your needs, act quickly. With low inventory and high prices, the last thing you want is to be in a bidding war.
If you are in a bidding war, there is more you can do other than simply raising your offer. If there were any contingencies, you may waive them. Contingencies are terms that have to be fulfilled before the deal can be closed. By waiving them, you show how invested you are in the property. But you must know what contingencies you are waiving. For example, if you waive the inspection contingency and then find a fundamental problem with the house, you can either lose the earnest money deposit by backing out of the deal or pay for the repairs. Make sure to consult with your realtor on this important topic.
Another strategy is to include an escalation clause. An escalation clause says that you will pay x amount for the home, but if another buyer comes in with an offer more than yours, you are willing to increase yours to y. While this does give your hand away, there is nothing wrong with being upfront in letting the seller know how serious you are about the house. If you are going to include this clause, you should work closely with your real estate agent to make sure it works within your budget and strategy. The escalation clause may or may not work in your market.
3. The Uncertainty of 2021
With all the uncertainty about the economy, especially about where the economy will be in the next year, it is hard to decide if now is the time to sell. Interest rates are incredibly low, with close to 3% for 30-year fixed and close to 2.5% for 15-year mortgages. While the Federal Reserve has indicated that the low mortgage rates will stick around, they do not control the mortgage rates. Mortgage rates are based on supply and demand in a secondary market, which the Federal Reserve does not manage. Interest and mortgage rates may be very tempting right now, but keep in mind that the housing market has limited supply, which is increasing the demand.
So, should you wait for 2021 to sell? While there is a fear of a housing crash, the jury is still out. According to the Mortgage Bankers Association’s Research Institute for Housing America, in September 6 million households failed to pay their rent or mortgage. When you take into account how much debt has been accumulated over this pandemic, and how many people have been unable to pay their debts, it does not bode well for the housing market. On the other hand, the strong demand, low rates, low supply, and qualified buyers are the reasons the housing market didn’t crash in 2020 and why it may not in 2021. House prices are also on the rise, and National Association of Realtors Chief Economist Lawrence Yun predicts that they will rise by 3% in 2021, with sales jumping 9%.
Selling your home during a pandemic is difficult and confusing, which is why you need an experienced and passionate realtor by your side. As a top producing agent with 20+ years of experience in the East Bay and with over 25+ transactions closed during the pandemic, I am able to assure my clients a safe journey throughout these stressful and unpredictable times.
I have helped hundreds of clients showcase and maximize the sale of their homes in the Greater San Francisco Bay area and the counties of Alameda and Contra Costa. My experience as a former appraiser allows me to help my clients understand the market. If you have any questions, I am here to be a resource for you.