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Seller Beware
As interest rates have gone up, buyers’ tolerance has gone down.
Generally speaking, the mindset of buyers now is dramatically different from two to three years ago.
Buyers used to be more open-minded and flexible and now that has changed.
Higher rates have caused them to be far less tolerant of:
- Aggressive pricing
- Wear and tear
- Properties in need of updates
- Properties not staged
- Defects and bad odors
- Unsightly neighboring properties
Essentially, buyers are saying “If I am going to pay a higher interest rate, the property needs to be fairly priced and in very good condition.”
Sellers who are not aware of this dynamic, are the ones who have properties sitting on the market for excessive time.
The Price is Right
This is an interesting and important time of year for current home sellers.
Thanksgiving is approximately 45 days away which is an important deadline for home buyers.
Many buyers who are considering a move this time of year would like to close on a home before Thanksgiving.
Current home sellers have a one to two week window to have their property under contract so a buyer can close by the Thanksgiving deadline.
Activity always slows in the winter and typically doesn’t show a noticeable increase until March.
So, proper pricing is paramount today so that sellers can take advantage of the seasonal window which is closing soon.
Increasing Reductions
More and more sellers are having to reduce their listing price.
Nationally, 37% of all home sellers have recently had a listing price reduction. This is according to a recent report from Altos Research.
This is up from 30% in May and is now at the second-highest level since 2018. The highest it has been in the last five years is November 2022 when it stood at 41%.
A “normal” range is between 25% and 30%. Today’s number is a result of softening demand based on higher interest rates.
Proper pricing is always important for a seller and is especially so now as we enter a typically slower time of the year with added challenges related to interest rates.
Showings to Sell
How many showings will a property have before it sells?
In Northern Colorado, the answer is eight.
This is according to our local MLS system called IRES which tracks the median number of showings a property has before going under contract.
This information is valuable to sellers so they can have realistic expectations while starting the process of selling their home.
It is also a useful guideline to gauge if a property is priced correctly. If a home has had more than eight showings but is not under contract yet, there may be an issue with the price and/or condition.
Counterintuitively, this statistic is lower today than it was in the hot market of 2021. Back then the median was 12 in Larimer County and 10 in Weld County.
The reason why it was higher then, even though the market was stronger, is because there were many more buyers looking at properties. Back then there were so many buyers that many homes only allowed 15-minute showing windows in order to accommodate all of the people who wanted to see homes.
Seller Facts
Here are some fun facts about recent home sellers. This research comes from the National Association of Realtors survey of home buyers and sellers:
- 10 years = the average time recent home sellers have lived in their home. This number has remained essentially unchanged for the last ten years. From 1987 to 2007 the average was 6 years.
- 89% = the percentage of home sellers who use a Realtor to help sell their home. This has been trending higher over the last 20 years. In 2001, 79% of home sellers used a Realtor. As the transaction gets more and more complex, more sellers seek the help of a Realtor.
- 75% = the percentage of home sellers who found their Realtor through a personal relationship as opposed to seeking out an agent they didn’t know.
- 77% = the percentage of home sellers who only interviewed one Realtor for the job of selling their home.
10 Key Qualities to Look for When Selecting an Agent
By John Trupin
Buying a home is one of the most significant financial and emotional purchases of a person’s life. That’s why it is so important to find an agent that can not only help you navigate the home search process but one who can also answer your questions and represent your needs from start to finish. Most importantly, your agent should care about your happiness and ensuring that you find the home that best fits your needs.
Here are some qualities to consider when selecting a real estate agent:
- Likable. More than likely, you will be spending a lot of time with your agent, so look for someone that you enjoy interacting with.
- Trustworthy. One of the best ways to find an agent who you feel you can trust is to ask friends and family for a referral. Another way to do this is to interview different agents and ask for client references.
- Effective listener. While your agent can’t read your mind, they should be able to make educated recommendations and offer advice by listening closely to your needs. Make sure you talk to your agent about your priorities, what types of features appeal to you, as well as any factors that could be deal breakers. This will arm your agent with everything they need to help find you the perfect home.
- Qualified and experienced. Make sure your agent has the qualifications and experience to meet your specific needs. For example, some agents have more experience with short sales, while others might be experts on certain neighborhoods or types of housing. Your agent should also be fully trained in contract law and negotiations.
- Knowledgeable. A great agent is someone who is out in the neighborhoods, exploring communities, visiting listings, performing marketing analyses, and collecting all the information that you need to make an informed, confident decision about your real estate needs.
- Honest. Your agent should be upfront and honest with you about every aspect of your home search process – even if it involves delivering bad news. The best real estate agents are more concerned about finding the right home for their clients, not just the home that brings in the fastest commission check.
- Local. Every community is different and all real estate is local, so it’s important to find someone who really knows the local market and can provide you with whatever information you need to familiarize yourself with a particular area.
- Connected. A well-connected agent will have relationships with lenders, inspectors, appraisers, contractors, and any other service provider you might need during your home search.
- Straightforward. You want an agent who will work hard to help you find the best home, but you also want someone who will be straightforward with you about the process, the market reality, and what is realistic for you.
- Committed. Your agent should be in it for the long haul, meaning that they’re looking out for your best interests every step of the way, no matter how long the process takes. The best way to find an agent with these qualities is by asking around. In all likelihood, someone within your circle of friends or family will have experiences to share and professionals to recommend. You can also search for agents based on area, so you know you’re getting someone who is knowledgeable about the neighborhood(s) you’re interested in. Click here to learn more about the buying process.
