When is the right time to Sell?
Question: Is this a good time to sell?
Answer: That is a question about today's market. Certainly in the first month of this new year we have seen the activity increase. There are a lot of buyers in the market and we are seeing multiple offers on many homes listed for sale. Some of this is just pent-up demand and some of it is people trying to beat the deadlines for the government tax credits for the first-time buyers and move-up buyers. along with these reasons is the fact that mortgage rates are still at all time lows. In Yorba Linda the inventory levels are low which gives the seller an advantage. Supply and demand is alive and well and moving the prices upward, especially with homes priced under $700,000. Another issue that remains on the horizon is the release of bank-owned homes. Every community has many homes that are currently owned by the bank but not on the market for sale. Eventually these will be in the marketplace and put pressure on the prices as they raise the inventory level and are often priced slightly below market levels. Yes, now is a good time to sell!
Answer: I imagine there are many people who are asking that same question. Certainly the market is robust right now and we are seeing prices rise. I believe the strength of the market is coming from buyers who have waited anticipating the market may go down but now realizing that it is, in fact, going up. On top of that the interest rates have crept up. As a result of rising prices and increasing interest rates, the buyers are aggressive about purchasing a home now. That would be an indication that it is a good time to sell as you will get a top price for your home. What if you wait for a year? I can predict yesterday but tomorrow is a different story. I have said in other columns that this rise in prices is only bringing us back to a normal market and is not a bubble. With that in mind, I would expect the market to continue to rise at a 5-10% rate for the next year. I would also expect that interest rates may climb into the mid 4% range. It could rise higher than that but I keep thinking that the government wants to keep the rates low so that they pay less on the government bonds (funding our national debt). If I am right, then waiting a year would bring you a higher price for your home. On the other hand, you can depend on today's market and know, generally, what your outcome will be. If that outcome is satisfactory and achieves your goal to move on, then I would seriously consider selling now. As we all know in a global world things can change rather quickly and dramatically. If the economy stalls and unemployment does not improve, then there will be fewer buyers able to purchase. If the pressure on interest rates demands that they rise to over 5% that could cool the market, even though 5% interest rates are still good historically. It is the old "bird in the hand" story applied to real estate. We can't be sure there are "two in the bush." Timing the market is always the goal but it is rarely achieved. Consider, in making your decision, what will bring you satisfaction and meet your needs and don't look back.
Answer: It used to be that there was a fairly consistent trend in the market. The trend would be that the inventory started to climb right after the Super Bowl Football game. People didn't put their homes on the market during the holiday season as they did not want to be bothered by people coming through their homes during that time. So, the inventory would rise from February to April and then the buyers would show up as they want to purchase a home after the school year ends and before the next school year begins. Therefore the selling season was most active from May to August. That is still somewhat the case but there are many schools that don't have the same summer breaks for the children and that changes the demands of the buyers. The market forces that drive sales now are more related to the rise or drop of housing prices and the status of interest rates. We just saw an aggressive buying season that began in January or February and continued through June. These were buyers that noticed that prices were rising and so were interest rates so they were buying up everything in sight. Now the interest rates are around 4.3% for a 30-year mortgage, which is still a wonderfully low rate historically but up nearly 1% from the low. Some think that may drop again while others anticipate it will continue to rise. The uncertainty will drive some buyers to take advantage of the still low rates and find the next home regardless of school calendars. The market we are currently in could be best described as a balanced market where the pressure on prices to climb has lessened but at the same time there is not pressure to lower prices. I would suspect that the time on market may increase slightly to get a home sold as a result. We are seeing buyers in the market all year long due to relocations by companies and retirements from baby boomers who are moving to their retirement homes. This goes on all year long. So, if you missed putting your home on the market in the so called "selling season" I would not be concerned about listing it now as there are many buyers in the marketplace all year long. During the holiday period of November and December, many buyers use that time to go looking for their next home as they have time off and combine trips to Southern California to take in the entertainment value plus go on a home-hunting expedition. I believe you will see a strong buying season from September through December.
Answer: Immediately I would ask you a few questions to give you a better answer. Do you need to sell by a certain date? What are your reasons for selling? When would it be best for you to have your home sold? Where are you going and when do you need to be there? Now for a general statement about selling in the holiday season. There are still many buyers in the marketplace that need and want to find the right home to buy. Some of those people are relocating from one part of the country to Southern California and would like to be settled in by January 2014 for their children to get into the school at the semester change. Those folks are looking now and will likely buy in the next month in order to close by January 1st. That time frame may extend depending on the school start next year. There are other buyers that have more time to look during the holidays with long weekends and Holiday breaks for Christmas and New Year's. There will be fewer buyers but the buyers that are looking are serious and usually make quicker decisions. Normally you can expect that the inventory of homes will steadily decrease from now until the end of February as many people chose not to list their homes during this time. As a result you will have an advantage with less competition. Our team has experienced excellent fourth quarters (October through December) over the years due to the above mentioned situations. Open houses will not have as many people coming through but those that are coming through will be real buyers since the others are out shopping or partying. Of course there are some cautions with this time of the year, like having an open house on a holiday weekend will not make sense and having showings when there are presents all around is not a good idea. No point in promoting that you have a lot of gifts under the tree. So, there are more cautions to pay attention to during the holiday period but that can be mitigated by insuring that every showing is accompanied by a licensed real estate agent with a professional business card. There is something to be said about the happy attitudes of people during the gift giving season…better to be nice than naughty and what better way than to buy a new home to start the new year. Therefore, if you need to be moved on by March of next year, then it might make sense to list now. If you don't need to be anywhere until April, then I think you can wait until next year. If there are conditions that may make your house harder to sell, that could move up the list start date. But, be assured, there will be many sales taking place in the last quarter of this year and maybe one of those should be yours. Thank you.
Answer: Many people think that listing at this time is not a good idea as people aren't looking for a home during the holiday period. That is just not true. There are fewer buyers looking but those that are looking are usually very serious or they would be at the mall instead. Traffic at open houses tends to be less but, again, those that are at open houses are serious buyers. Often they are people who are being relocated to the area and have more time to look, or travel, to the area in search of their next home. You might even be surprised to see people coming to your home during the week between Christmas and New Years as they have taken the week off and are using it to home search. Enough about the possibility of getting a buyer during the holidays. I have a couple of recommendations as you put your home on the market. When you take the pictures of your home for the MLS, consider taking down the decorations or waiting to put them up after the pictures are taken. Why? If your home has not sold and it is now mid-January, it appears your home has been on the market too long if the pictures are still "Christmassy." If the decorations are already up, then try to shoot around the obvious things like the Christmas tree or wreaths. The stockings hanging by the fireplace should be avoided in the pictures. Once it is listed you can decorate to your heart's content. The other thing to avoid is piling up the presents under the tree and then having people coming through your home to take a look. It can be an invitation to those who might decide to come back later and help themselves to your gifts. There are "grenches" out there I am afraid. Just be careful concerning your presents and don't tempt someone beyond what they are able to resist. Just a reminder to all those whose houses are listed for sale, please keep your valuables out of sight and your correspondence in the drawers to insure your identity is safe and put away. I believe you will be surprised by the amount of traffic you get during this period and will not be disappointed that you listed your home during the holidays.
Question: I want to move the end of the school year, around June, when should I put my house on the market? What are my options if it sells before I need to move?
Answer: You are asking a question that I suspect many people are asking about this time of the year. We are about to enter into the season where the number of listings begins to grow. Right after the Super Bowl, the last party of the season, people decide to list their homes. The number of listings will grow through around April or May and then it stabilizes and begins to go down from August as fewer homes come on the market. That is the general pace of the market for your consideration. Therefore, if you list in February you will have fewer competitive homes on the market but may have fewer buyers. I would say you should consider the March timeframe to list. If the market is strong, you might expect to be on the market for about a month and then in escrow for 30-45 days. That would mean you would be sold in May sometime. That is an estimate or an example of how that would work; your timetable may likely vary from those estimates. So, what are your options if it closes earlier than you desire? At the beginning, when you are discussing the terms of the transactions, you can ask for a longer escrow to close when it is best for you. You can also ask if you can rent back for a period of time to get to the date you desire. Worst case you can store your possessions and enjoy hotel living for a short period of time. It could be quite possible that the buyer does not need the home until after their children are out of school wherever they live and as a result would like to postpone the move-in until the summer. It is not uncommon to work out those details in the process of negotiation of the contract. Generally, rent-backs are short periods of time as the buyer wants to move in once the escrow closes, so it is possibly better to extend the escrow period. This is one of those times that the Realtor earns their keep as they can instruct you through the process and advise what the options are to achieve your goals as well as satisfy the buyer so that all parties are satisfied at the end of the day.