Listing just to see what happens may seem like a good idea, but putting a home on the market too soon can backfire in a big way.
Selling a home does not happen overnight. Typical sellers reach out to a real estate agent or start researching their home’s value online many months — sometimes even years — before they are ready to put the “For Sale” sign in their yard.
Often, a home sale is the result of some life event: a marriage, divorce, death in the family, retirement or another child. It’s typically hard to “time” these events; therefore, it’s not easy to time a real estate transaction. Here are some points a potential home seller should consider before deciding to list their home.
If you’re not certain, you’re not ready
If you don’t have a new home to move into or a plan once you sell your home, it’s not a good time to list your home for sale. Sellers without a real and concrete plan are not serious sellers, but only opportunistic.
A seller without a plan will likely be “testing” the market, and that translates into overpricing the home. If the seller overprices the home, it’s not going to do her any good. The market is smart, and rarely will a knowledgeable and active buyer overpay for a home.
Ask yourself, “If I get an offer and sign a contract for a 45-day close, do I know what I will do?” If the answer is no, you should simply not list, or you will do yourself more harm than good in the long run.
Once you list, the clock starts ticking
Today, with access to so much information online, buyers will know the good, bad and ugly when it comes to listing history and data.
If you list your home at too high a price or in poor condition, you risk sitting on the market, without offers and likely without any showings or potential buyers.
That lack of interest will follow you. Once you’re ready to sell your home at the right price or in the right condition, every buyer will know your history. They’ll see the series of price reductions, the old photos, or the previous listing when you were not ready to sell.
All of the old listing activity sends a message to buyers that there is something wrong with the home or with you. Buyers will hold back on such a stigmatized home, and instead focus on a newer listing that is priced right and shows well.
You can plan for the market, not time the market
If you know that your third child is on the way, or that your new job is too far from your current home, you’ll have the luxury of not being under the gun. This allows you to take advantage of market conditions, as opposed to timing the market.
Knowing that you will list the home in the spring or the fall or in February will enable a smart seller to prep the home, make the necessary improvements and get the property market-ready.
Working with a good local real estate agent, you should watch the inventory come and go, see the competition and get the word out at the right time. If a comparable home gets three offers in less than a week, then you know two other buyers are out there. Being ready to go, you can then capitalize on the market conditions.
Real estate transactions happen all year long
Some of the most successful sales happen in the dead of winter when inventory is low, but buyers are still out. Have a sales plan months in advance. Never list your home before you (or the home) are ready.
Many homeowners are emotionally attached to their homes, but listing it at a high price or not making the necessary improvements sabotages their ability to sell it. If you find yourself struggling with the process, don’t list your home yet. Take a step back and wait. The right time will come, and waiting will ensure that you get the most from your investment.