If you want to move, now’s a good time to sell
Undoubtedly you’ve heard of what has been dubbed the “shadow inventory,” a term used to describe the 2 million houses that are in or about to enter the foreclosure process and have yet to be put back on the market by lenders and investors.
But what about the “closet inventory,” or the many more millions of houses that could be put on the market in droves by their owners once the housing sector starts to rebound?
Obviously, no one knows when this will happen. But when it does, an unknown number of current owners who have been paying their mortgages each and every month or own their homes free and clear can be expected to at least test the market.
We’re not just talking about empty nesters and seniors who want to move to better climates, or perhaps want to downsize in the same general vicinity as they are now, or growing families who need larger places. We’re also talking about people who want to take jobs somewhere else and those who just want to move laterally, to better school districts, perhaps, or communities with lower taxes.
Right now, the only thing keeping these people from moving on is that they must sell their current homes first. They could put their homes on the market anytime they like. But with listings overwhelmed by underpriced foreclosures and short sales, the competition is tough. So the conventional wisdom seems to be to wait until prices start rising again, or at least bottom out.
But is that really the best option? Is it smart to try to outlast the buyer’s market?
Not according to the majority of a dozen or so real-estate professionals questioned during the past few weeks. Almost universally, they say if you want to move, now’s as good a time as any to try to sell.
“If you are planning on buying another home, then most definitely now is the right time” to sell, says Maria Picardi-Kenyon of RE/MAX Tri County Realtors in Hamilton, N.J.
Of course, you would expect people who make their living peddling real estate to say something like that. But their opinions have a degree of validity. After all, even at a time when buyers are in control and nothing seems to be selling, some 5 million properties will change hands this year. But if your house isn’t on the market, it won’t be one of them.
“Every day it’s on the market, it’s another day you are getting exposure and potentially reaching the buyer who is looking that day,” agrees Tim McBrayer of Howard Perry & Walston, the Coldwell Banker affiliate in Raleigh, N.C. “And there are plenty of buyers who are going to be better qualified by lenders, who are going to find lower mortgage rates available to them than at any time in history, and who are probably going to be more serious prospects.”
Not everyone agrees with that reasoning. Unless you have no choice but to sell now, Hank Miller of Keller Williams Atlanta North in Georgia is one of several agents whose advice is to “wait for a better time.”
For the most part, though, if you have to sell for less than what you want, agents reason, you probably can pick up your next place at a relatively lower price, too.
“If a seller is interested in moving up and buying a more expensive home, now would be a great time to put his house up for sale,” says Heidi Sloan of Keller Williams Realty in Charlotte, N.C. “You’d definitely come out ahead when combining the two transactions.”
Realty professionals admit that you have to be aggressive these days when pricing your place. Or, as Amy Downs, a Keller Williams agent in Dallas, puts it, “you have to be willing to give a deal to get a deal.”
In you’re not, you could be just spinning your wheels. “Unless a seller is competitively priced,” says Sloan in North Carolina, “he won’t even get any showings, much less an offer.”
But the competition may not be as great as it seems. In many price ranges and in many markets, there actually is a shortage of listings that are not foreclosures or short sales needing a lender’s approval to proceed.
Waiting months on a distress sale to go through may be worthwhile for true bargain hunters. But the market is full of would-be buyers who are looking for a hassle-free transaction. So if you can close in a reasonable amount of time, your house is likely to stand out from the rest.
Besides, pricing aggressively doesn’t mean that you have to give your home away. “Because you don’t have to sell, you have the luxury of being able to wait out the market until the offers are more in line with what you want,” says McBrayer, the Raleigh agent, who notes that an offer is “a starting point” for further negotiations.
If the house doesn’t sell, you’ll at least receive some valuable feedback about why. It may be more than price. Perhaps it doesn’t show well. Maybe it needs a paint job, or the kitchen is woefully out of date. Whatever the reason, you have the luxury of time. So you can take the place off the market, make the necessary improvements, and have it ready to shine when the real-estate market turns.
Distributed by United Feature Syndicate.
