As the spring home buying and selling race begins, the 2016 Zillow Group Report on Consumer Housing Trends suggests that both buyers and sellers should start the process as early as possible. This was the advice given by the majority of 13,000 U.S. residents who participated in a recent survey. A majority of both buyers and sellers said that their biggest regret was in not starting their home search sooner or beginning to prepare their home to sell earlier.
As most Realtors know, this year’s real estate market is very competitive due to the shortage of for-sale homes, which sometimes results in multiple offers and escalating sales prices. U.S. home values across the nation are up 7.2 percent over the past year, and there are three percent fewer homes to choose from than a year ago, according to the January Zillow Real Estate Market Reports.
"This spring, both buyers and sellers should be prepared for fast-moving sales, intense negotiations, and even bidding wars," said Jeremy Wacksman, Zillow Group chief marketing officer. "Understanding whether you are in a buyer's or a seller's environment will help you manage your expectations and give insight into what you're going to need to bring to the table in order to close the deal."
So, how can Realtors prepare their clients, both buyers and sellers, to prepare for today’s competitive real estate race? There are several things your clients need to know:
Tips for Buyers
- Be flexible. Clients need to be willing to rent for a while If a desirable home can’t be found at the right price. More than half (52 percent) of buyers said they also considered renting.
- Advise clients to be realistic about their budget. Before clients meet with a lender, they need to take a good look at individual finances to determine the monthly payment they can afford. Studies show that first-time home buyers are more likely to exceed their budget than repeat buyers (39 percent vs 26 percent).
- Get their financing squared away early. Most Realtors will not even show a home unless the client has been pre-qualified for a loan. If you can get your client to meet with a few lenders four to six months ahead of when you're planning to show homes, that will determine the price of home they can qualify for. It will also enable them to make a competitive offer quickly.
- Let your client know that you have a winning track record. They will need to have an agent who has expertise in fast negotiation, leveraging escalation clauses, and winning bidding wars. Statistics show that only 46 percent of buyers got the first home on which they made an offer.
- Communication is key. Make sure you know your client’s preferred method and frequency of communication. The Zillow survey showed that one third (33 percent) of all buyers preferred phone calls over emailing (21 percent) or texting (15 percent).
Tips for Sellers
- Start early. The Zillow Survey showed that sellers regretted not spending more time prepping their home for sale and putting it on the market at a strategic time. As most Realtors know, many cities have a magic window in the spring when homes have a higher likelihood of selling quickly for more money.
- Work with an agent from the start. Oh, yes. If you could only let all sellers know this. The Zillow Survey showed that the majority (90 percent) of sellers who sold their homes quickly and for more than list price worked with an agent. Two out of three (58 percent) began working with an agent at the very beginning.
- Pay attention to the home’s online curb appeal. Who was it that said, “A picture is worth a thousand words?” This adage also holds true in real estate sales. Statistics show that the majority of buyers begin their search online and sellers who sold their home for more than list price had made imagery and home information available online. It helps to have the yard looking perfect, as well.
- Home improvements can be a worthwhile investment. Be sure your sellers get all the home improvements completed before putting the home on the market. Sellers whose homes sold for more than list price tackled home improvement before listing their home.
- Don't be afraid to try again. Of those who sold their homes for more than list price, 26 percent had taken their home off the market once to adjust the sales price, opting to start anew rather than letting the home languish on the market with minimal activity. This attracts new lookers to the website.