What Options Do Sellers Have in a “Sell High, Buy High” Market?
Sellers today might be getting tired of hearing how the market has skyrocketed in the past years because chances are they might be feeling a bit stuck or frustrated on selling their own home in today’s market. Why? Because if their local market is doing really well (increased home prices, lower days on market, etc.) that means that whatever new house they would be looking to buy will also be affected by the same market conditions and will be priced accordingly.
You might have heard the old real estate adage, “buy low” and “sell high.” Well, unfortunately in most markets today (including Prescott, AZ), sellers are faced with the challenge of “selling high,” but also “buying high” for what they would be looking to buy. So what are folks to do when they are faced with this challenge? We have represented and served numerous clients who have been in this same situation and this article is for those sellers who would like to consider a couple of options to make sense of selling their home or not.
Here are two things to consider when deciding to sell or not sell in this market:
OPTION #1: Sell if your house is up to snuff.
You would think that because of inventory (supply) has been consistently decreasing through out the years and the amount of buyers wanting to move here (demand) is gradually increasing every year, that buyers wouldn’t be so picky about the condition of your home. Think again. The real estate industry, nationwide, has never seen buyers like this before when it comes to their expectations of the home they would like to purchase. This is a topic for another day, but we think it has a lot to do with the influence that HGTV and a myriad of real estate and housing shows that depict a “fantasy” world of what sort of power buyers possess. Combine that with the younger generation of homebuyers that might not be as “handy” to take on house projects and you have a recipe for the pickiest types of buyers that we’ve seen in ages. You might be thinking, “So, how does this help me?” Use this market trend to your advantage. If you have the ability to remodel your home with today’s most wished for finishes and amenities and with what a HGTV host would consider “stunning”, you can expect to have buyers that are willing to pay you more money for your home. There has been plenty of data to suggest that within our own local market from homes that needed remodeling or updating to the ones who were flawlessly remodeled.
SELLER ADVICE: If your home is in rough shape or is substantially outdated you need to evaluate how much money you have now to invest in bringing it back up to today’s standards. If you have the cash, tackle on a modest remodel to maximize your return on the sale of your home. If you don’t have the cash right now, resist putting your house on the market. Why? Because you won’t get what you want for the house in order to buy something “better.” The market is not allowing for this opportunity to happen. Buyers looking at your house are also looking at the other houses that you would love to be in as well!
PRO TIP: Ask your trusted real estate professional what types of things you should update and/or remodel in your home that will bring back the best ROI. So you don’t waste time and money on things that aren’t as important to a buyer. This varies from market-to-market, so make sure to ask.
Option #2: Sell in a higher market & move.
You might be living in a much “hotter” market that has appreciated tremendously. You love where you live and all the amenities that come with that, but should you bite the bullet on selling and find better deals in other nearby towns or maybe even out-of-state? That’s not a decision anyone can make for you, but it is an important one to ask yourself. For example, in the Prescott, Arizona market, there is a $100,000 to $120,000 spread between median prices in Prescott to the surrounding towns of Chino Valley and Prescott Valley! So if you own a home in Prescott and love it, but you might need a larger home for a growing family, downsize to a smaller home with less upkeep, or a newer home with less maintenance headaches… or you might just want to cash out on your current home and use that money for something special. Whatever the reason, you need to know that there is opportunity to make a healthy return on your home investment if you can live with moving to another market.
SELLER ADVICE: Ask yourself the question of what’s more important to you at this time. The amenities you enjoy from your higher-priced market? Or the ability to buy another home that can satisfy your practical or physical needs at a better price? Thousands of sellers are currently selling their homes in higher-priced markets (mainly on the coastlines and Southwest region) and are moving to places in the Midwest and Eastern states because of how much farther their dollars are going! Not to mention that many retirees are cashing out on their higher-priced markets, buying something more convenient in another state and putting their net proceeds into their retirement savings. The season of your life isn’t as important as simply asking yourself this question and knowing that it is an option that many are taking.
As most will be able to tell on this article – there isn’t that many “general” options for sellers in the current market conditions. By general I mean that every seller can have different challenges and/or goals and their options might look a little different. These two options are ones that can be contemplated by any seller in the country from what we know to be true of the markets. Have a discussion with your trusted real estate professional about your dreams and goals and they should be able to present some options for you that can have you selling and really benefiting from the decision.
All is not lost for sellers in this market, it just takes some more creativity to make a move that can reap you an amazing return on your home and a much better living situation that you have been looking forward to. Don’t get stuck on the “selling high” and “buying high” mentality. This same market scenario has presented itself for many years before our time and people found a way to make the best of it.
What Options Do Sellers Have in a “Sell High, Buy High” Market?
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