I have a question for homeowners thinking of selling this year. When are you planning to put your property on the market and why? Most people will respond: “In the spring, when the weather improves and most buyers are searching for homes.” My reply: Why wait?
Sure, the spring real estate market – the prime selling season every year – can expose your home to more potential buyers. And these buyers could generate a multi-offer scenario to purchase the house, townhome or condo. What’s not to like about that?
While true, it’s also a fact that your home will be competing in spring with more listings than any other time of the year. How will your home compare with the others? Will it push you to spend money to address home repairs or outright remodels simply to meet or beat the competition? If yes, there is no evidence that the cost to make those improvements will lead to an equivalent appreciation in the home. So, again, why wait?
There are other advantages to putting your home on market in winter. At John L. Scott Real Estate, we like to remind sellers about the phenomenon called “the backlog of buyers.” This is the group that took a break from home-searching in autumn to focus on the school semester, the Seahawks’ or University of Washington football seasons (yes, I’m serious!) or simply to spend time with family/friends during the holidays.
The backlog of buyers are now returning to the market along with new people to the home-hunt. What I like about this time of year is that these buyers are serious shoppers, genuinely looking to purchase a home and less likely to be tied down to family, school or work obligations. They are not looky-loos or buyers seeking to “kick the tires” for a few months before either making an offer or halting their search for another year.
The chart below, courtesy John L. Scott, shows the last five years of new listings (excluding short sales and new construction) for each phase of the housing season in our area.
We know for near certainty that the housing market will heat up with the greatest number of listings in May/June. That’s when open houses attract the greatest amount of foot traffic (and interruptions to sellers’ daily routines).
According to the latest data from the Northwest Multiple Listing Service, the number of active listings on the market in King County is 39% lower than last year at this time. With fewer properties on the market, sellers have more control – giving negotiating leverage to owners listing a home this time of year.
Let’s summarize why it’s a good idea to list your home sooner rather than later:
Competitive advantage – Your listing will be in competition with more homes this spring and summer than any other time of year. Why sell then when you can showcase your home among fewer listings now? Listing in winter is arguably a case of a “bigger fish in a smaller pond.”
The price is right – With more serious shoppers and fewer homes on the market in winter, sellers have a greater chance of not only getting quick offers but possible multiple offers and more money for your home.
Less costly – The price of home improvements can reduce your net proceeds – the final amount you earn on the sale. Amid greater competition in spring and summer, homeowners could find buyers seeking repairs that are based on an independent evaluation from a home inspector. With fewer homes on the market in winter, buyers may make more-reasonable demands or even waive the home inspection altogether just to get your home.
Research pays – Talk to your real estate professional to better understand the market, not state or even county-level data. I’m referring to the hyperlocal market – down to the ZIP code or within a few blocks – to identify the number of listings from one phase to another and to determine the best possible timing to showcase the home. Research will also show sellers what offer price the market will bear and even how many buyers are looking for homes just like yours. Use that research to pin down your price and timing strategy.
If your household is tied to outside influences such as school calendars or business-travel schedules that make moving in the first three months of the year more challenging, then consider this: Put the home on the market in March/April – still before the height of the housing season – and negotiate with buyers to delay the closing date until May/June.
Or, you could still close on the sale in winter and rent the home back from the new owner for a period of time. This could allow your children to get towards the end of the school year or allow you to tidy up other commitments before leaving. I would not necessarily advise this extraordinary step; this has led to unfortunate situations where sellers/tenants refuse to leave at the agreed time. Please discuss this matter with a real estate attorney to ensure your assets are protected and intentions addressed.
Bottom line: To get a leg up on the competition, strongly consider marketing your home sale soon. Avoid the rush!