Roughly 5.51 million existing homes changed hands in 2017, with many home purchases representing a person or family who suddenly gained the ability and financial mobility to make a positive financial change in their life. A lot of the time when people talk about home sales, they are overly focused on the buyer. The discussion orbits around the young couple who bought the home to raise a family in, or the person setting out on their own in a new city or area. However, there are plenty of people who need to sell a home for the same reasons. There are some unique reasons as well, like:
- Financial hardship making it too difficult to hold onto a house, or selling a house with a tax lien.
- One’s lifestyle no longer matching the house (like a larger home after children move out).
- Those who need to change areas for sudden reasons (job changes, taking care of family).
- Needing to sell a home in a state you don’t currently live in (due to inheritance or something similar).
In times where you need or want to get your home sold quickly, you need to be ready to look off the beaten path for options that some may see as unconventional but are no less effective. Here’s how to make this happen.
The Seller’s Market in Review
If you have friends and family trying to a buy a home, chances are you may have heard them griping about it being a seller’s market for real estate. This is true, and that fact is why that even if you’re not desperate to sell, you may want to consider thinking about it.
Basically, just like anything else, the real estate market revolves around supply and demand. If there are more available homes than people that want to buy them, the buyer has the power to control things like what prices they buy at and what conditions that put on things. However, nationally, things are the other way. According to Business Insider, the 10 hottest real estate markets in the country are as follows (not in order):
- Dallas, Texas
- Portland, Oregon
- Nashville, Tennessee
- Denver, Colorado
- Austin, Texas
- San Francisco, California
- Charlotte, North Carolina
- Seattle, Washington
- Raleigh, North Carolina
- San Jose, California
However, you don’t need to be in these cities or even these regions to have plenty of people interested in buying your home. Take a look at some of the statistics surrounding homes for sale in your area. If you see homes on the market for only a few days or sale prices above the median, chances are you’re in a seller’s market.
The reason for so much demand and so little supply is for numerous reasons. For one, it’s getting more and more difficult to build new homes. According to Robert Dietz, chief economist at the National Association of Home Builders, “Lumber prices have increased dramatically, by about 25% over the last 12 months.” In addition, there is an ongoing labor shortage in the construction industry, meaning that it’s going to cost more and take longer on average to craft a dream house from the ground-up. For people who are trying to move in quickly for work, this simply won’t do.
Granted, the issue with not enough new houses isn’t one strictly confined to this year. Over the last few years, there has been a major issue, especially in major cities, with construction not matching population and job growth. In many ways, what we’re seeing regarding home sales is the culmination of a trend that has started since the Great Recession.
What Makes Your Home Sell?
At this point, all these factors come together to make it extremely appealing to sell your home and sell it quickly, whether you’re interested in profit, speed, or both. Not only are there lots of interested buyers, but interest rates are relatively low for the time being, in case you are worried about where you will move into next.
So, at this point, the question should be less “why should I sell” and more “what do I need to sell?” Chances are that you’ve heard a lot of talk from real estate sources about the different changes that you may need to make in order to get your home sold. This can include anything from:
- A new paint job
- Renovating the kitchen/bathroom
- Investing money and time into landscaping/curb appeal
- Depersonalizing the space
Here’s the thing about that knowledge. It’s not necessarily wrong, but it doesn’t really apply to the current housing situation. If you were trying to sell the conventional route, adding a new tabletop or paying for landscaping isn’t going to be the ultimate difference maker. These days, what really is making the sale is the community and the area. This includes factors that you can’t really control on your own. For example, if your area has a well-acclaimed school district, that’s going to draw interest no matter what renovations you make.
Perhaps the biggest issue in this regard, though, is the fact that not every person who needs to sell a home is going to have the means to make these investments. For example, let’s talk about a person who has fallen on hard times and has a tax lien against their home, and needs to sell quickly. It may not be the smartest idea to try and fund a renovation in order to try and get more for the house.
To put this in perspective, your average home remodel for a home that’s less than 1,000 square feet costs an average of $18,347, with a similar remodel of a 3,000- to 4,000-square foot home costing an average of $36,121. Even if you try to narrow this down just one or two rooms, it can still incur a large cost, like if you want to remodel a bathroom and need to change plumbing as a part of it.
When you top the expense involved with the current market, don’t feel that you need to make an overt investment into your home to get it “ready for sale.” There’s a reason why plenty of ugly homes or homes in need of repair still get sold, and even at decent prices, too. The key is turning some of the other conventional wisdom about selling your home on its head.
Your Home Selling Options
Statistics show that the vast majority of people who try to sell a home do so with the help of a real estate agent, and on paper, this sounds like a sensible decision. The basic role of a real estate agent is to help take the process of selling a home and make it easier (there’s no legal situation forcing you to use one).
To do this, a good real estate agent will have an understanding of their local market and will help pick a price and target buyers that are most likely to meet that price. In addition, they will help you do a lot of the things that we talked about in the last section. Do you need to do something to make your home more appealing from the curb? A real estate agent will do it. Taking professional pictures to get the best look for your listing? They can do that all. Perhaps the most valuable service they offer is vetting buyers. This will keep you from wasting time with buyers who will either get cold feet or not get the financing to meet your price. In fact, “keep you from wasting time” is perhaps the best way to sum up the function of a good real estate agent.
The problem with this is that “wasting time” doesn’t mean not spending time. An agent will still require time in order to do this properly, which may not match the needs of people who are trying to sell their home quickly out of necessity. Of course, there’s also the matter of the real estate agent’s commission, which can range from 5-6 percent of the home’s sale price. This may mean equity that you don’t want to give up.
Another thing that happens is that there are also poor real estate agents for every good one. These individuals may work hard, but don’t have the knowledge or expertise to do many of the jobs that we talked about before. In a seller’s market, chances are that people are going to still be able to get their house sold with a sub-par real estate agent. But chances are they won’t get the price they were hoping for.
The other option in this regard takes things to another extreme: selling the house yourself. Chances are that if you scout homes in your area, you’re going to see ones with the sign “for sale by owner.” Selling a home by owner isn’t too much different than when a real estate agent does it. The difference is that coming up with a price, creating and maintaining a listing, and meeting different buyers all falls on your shoulders.
The issue here is a little more obvious. If an inexperienced real estate agent may have trouble getting the best price for a home, so would an owner with no experience. In addition, it can be quite a time commitment to vet and meet every buyer who comes your way, especially if you’re in a hot area for real estate. For a lot of owners, especially those in distressed situations, the added work and pressure make this option a poor match.
The biggest issue with a lot of the options of selling your home is that it’s assumed that your situation is ideal. You have a house that’s all prepped and ready to go and are willing to take the time you need to find the best buyer possible. This just isn’t the reality of thousands of people across the U.S. Luckily, there is a third method that can help people in these situations.
Why Sell Your Home for Cash?
There’s probably a pretty good chance that if you’ve spent any time driving around your town, that you’ve seen signs in people’s yards and elsewhere talking about selling a home for cash quickly. There’s nothing wrong with a little healthy skepticism, the notion that it may be “too good to be true.” But when it comes to selling a home for cash, most people go too far in the other direction. When you peel back the myths and misconceptions, there are some clear benefits to selling your home for cash. Here are a few of note.
- Say goodbye to last-minute failed sales
Those who have had their home on the market may have dealt with this in the past. You may have a motivated buyer, but at the last minute, they can’t secure loans they thought they would get, and the deal is done. Cash avoids this problem. The moment money changes hands, the transaction is done. This is great for people who need to sell quickly and can’t afford to “go back to the drawing board.”
- No need for repairs or renovations
We mentioned before how, while some may be tempted to “fix up” a home, in order to get it sold, it’s not a feasible idea for the current time. Many companies and individuals who buy a home in cash will shoulder that burden for you after the fact. In some cases, you may even be able to get away with leaving certain items behind if you don’t have enough time to clean up or declutter. This can be a life-saver in emergency sales.
- Fewer closing headaches
A home closing with a real estate agent can take weeks, which on top of the rest of the sale process, may be longer than you need. Cash deals skip most of the staging process and are quicker to close as well since there’s less worry about financing.
- Fewer headaches after closing.
This is more important when dealing with older homes or homes with outstanding repair issues. Sometimes, if a buyer finds something after the home is sold that poses a problem, they reach out to you directly and could potentially cost you more money in the future. The bulk of cash buyers out there are willing to buy as-is. This means that no matter what issues are outstanding on the house, you’re off the hook in terms of liability.
- More flexibility
This is probably the overarching benefit of selling your home for cash versus the other sale options. Because there’s less concern over the state of your house and financing issues, you can spend more time focusing on the issue that requires you to move in the first place. In addition, by getting a fair price on your current home, you will have a financial boost to help you on your way, wherever you need to go.
It’s important to remember when selling your home that yes, the market favors sellers. Projections show that across many of the major metro areas in the U.S, it may be like this for quite some time. However, not every person needing to sell a home is in an ideal situation. Financial or time constraints may mean that they need to move faster than conventional means like a real estate agent will allow. This is where the market’s state and companies like HomeGo can be utilized to your advantage.