STEP TWO: CHECK THE HOUSING MARKET
Market conditions will have a major impact on your selling experience. Understanding what is happening in the marketplace can help you develop and execute a realistic plan to sell your home.
- Gauge Market Conditions
Real estate markets are highly cyclical. The current status of the market can have a significant effect on your home selling strategy and the results you are likely to see. Try to develop an understanding of the state of the market so you have some idea of what to expect – and a feel for how hard you can bargain when negotiating with buyers.
- What’s Best – Hot or Cold Market?
Unless you’re planning to rent, you will probably be buying a new home at the same time as you are selling your old one, so it’s not always easy to decide if a hot market is helpful or harmful. As a general rule, if you are moving up – looking for a new home significantly more costly than your old one – you may want to act during a weak market, when the savings on an expensive new property will more than outweigh the losses on the older one. Conversely, empty-nesters looking to switch to a smaller home may want to plan the move during a hot market, when they can maximize gains on the larger home to be sold.
- When is the Best Time to Sell?
There are two primary selling seasons – spring and fall. Spring is the strongest, since many shoppers want to buy and move in before school begins. Summer and winter are generally very slow periods in most markets. Some areas have their own seasonality, however. If, for example, you are selling a home in a seaside vacation spot, summer is probably a great time to be on the market.
- Understanding Area Sales
Don’t listen to anecdotes and stories about bidding wars and houses being snapped up in one day. There is no substitute for hard data when you are considering selling your home. Check out actual sale and closing prices of homes in the area and try to develop a feel for the true state of the market