Sellers’ Market Challenges

Chances are you have noticed For Sale signs popping up all over town. The real estate market is currently experiencing a classic seller’s market, meaning there is more demand than inventory. According to Trendgraphix, there is only 1.8 months of inventory across Southern California (LA, Orange, Riverside, and San Bernardino Counties). With little inventory and mortgage rates at historic lows, sellers are sitting pretty, right? Well that’s half of the story. Inventory is a major factor in creating hot markets: Where there are fewer homes on the market, the demand rises, and homes typically stay on the market for a shorter amount of time. Yes, it’s great to own a home in a seller’s market, but don’t jump for joy just yet. There are also some potential downsides you’ll need to consider before listing your home for sale. Here are five scenarios in which a seller’s market can actually be problematic for sellers: Heed the following tips to help ease the burden.

1. From “For Sale” to “Sold” In a hot market, it’s possible for your house to sell super fast — even while you’re still hunting for your new house. Unless you plan to become an RV enthusiast and roam the country, you’ll probably need to buy another house. It will be smart to put contingencies in place for your protection. The Stovall Team can help leverage your opportunities and navigate buying in a seller’s market.

2. The appraisal falls short Your hot market is so blazing hot that people are offering more than asking price. Low appraisals happen more often than you might think, especially in rising markets. Sometimes there are insufficient comparable sales applicable to the home you want, or maybe distressed sales in the area have skewed the appraisal. We have seen appraisals come in below the agreed upon price and can cost you thousands. How you negotiate the offers you receive is more important than ever. We have helped many of our Sellers sell their homes for well over the appraised value. Let us help
you maximize your equity, we have the know how and expertise.

3. Bad offers all around During a buying frenzy, some buyers make promises they can’t keep. The Stovall Team works hard to vet offers. We won’t let you accept an offer that never had a chance in the first place. Let our business discernment work for you.

4. Trying to beat the 1031 clock, For our Investment Clients Section 1031 of the U.S. tax code lets you sell one investment property and buy another investment property without paying tax on the sale. The catch? The clock is ticking. You need to identify a property to buy within 45 days. In a seller’s market, “Sellers can find themselves in tough competition to buy a replacement property in the time needed to qualify the exchange to defer taxes,” says Crystal Stranger, author of The Small Business Tax Guide. But you can relax a little — you just have to identify the property in 45 days; you have 180 days to close.

5. Setting Your Expectations Too High Selling your home in a competitive market doesn’t mean you’ll automatically get offers for more than your asking price. When a reasonable offer from a strong buyer comes in, some sellers who expect extravagant offers often turn it down. What happens then? The property remains on the market, becomes stale, and may ultimately sell for less than the first strong offer. Whether or not you’re selling your home in a hot real estate market, it’s important to recall the basic tips of selling — and not get carried away with how many buyers should be interested in your home.

The Stovall Team places a premium on customer service, drawing on more than 60 years of combined experience and out-of-the box thinking to ensure that their Team provides the best customer experience in the business. CALL US TODAY 714.343.9294 OR 714.393.5377 VISIT StovallTeam.com!! Here are a few very simple, quick, ways to make sure you get the most for your home when you decide to sell.

Sources: Micah Stovall, Steve Stovall, Forbes, Realty Times