5 Lessons I Learned From Selling a Home in a Red-Hot Housing Market
Thinking about selling your home to cash in on a red-hot housing market? It can be a lucrative move, but don't expect it to be a breeze.
The U.S. housing market has been red hot for at least a year now, and it doesn't look like there's an end in sight. Homes across the country are still in high demand, and in some areas, buyers are offering tens or hundreds of thousands of dollars more than asking price to nail down a contract on a home. That has put a ton of extra cash in the bank accounts of sellers who are cashing in on the demand.
I decided to sell my home and capitalize on the red-hot housing market. It turned out to be a smart money move, but it wasn't all smooth sailing. I learned a few hard lessons along the way. If you've been thinking about selling your home in today's market, here are five lessons I learned during the process.
1. Significant issues will still be a hurdle for some buyers
We live in a tourist area in Colorado, and there were two major hurdles when we bought our home: the high cost of existing homes in town and the lack of infrastructure (and high-speed internet) in the rural areas outside of our city. I work remotely, so we can't survive without reliable high-speed internet, which ruled out the less expensive rural options.
This led us to buy a beautiful home in town but in a less-than-desirable location. We got a great deal on the price, but we knew it could also deter potential buyers when we listed it for sale. And it did.
When we put our home on the market, homes were going under contract sight-unseen. That was not the case for our house. The listing drummed up plenty of interest, but the early feedback from buyers was consistent: They loved the home but weren't sure about the location.
If you're dealing with similar issues, be prepared for challenges that put off some buyers, even in this type of market. Not all buyers will have the same reaction, but you may not be one of the "one showing and done" sellers.
2. If you list it, they will come (right away)
We were expecting our home to get some attention in the days after it was listed, but what we weren't anticipating was how much attention it would garner right after it hit the market. Our listing went live on a weekday afternoon, and there were multiple same-day showings scheduled within the hour. Buyers weren't fooling around.
Problem was, we weren't prepared for the huge influx of potential buyers to pour in on day one. It can be tough for me to pick up and leave the house in the middle of a workday, and I also had our 100-pound dog to deal with. I couldn't wrangle him, my laptop, and everything else I needed in such a short amount of time.
If you work from home and are planning to list your home in the near future, keep that in mind. There are ways to cut down on constant interruptions, like utilizing a shared work space temporarily, but by the time I looked into the options, they were full. It might make sense to tackle those types of issues before your house is listed. Otherwise, you may just have to deal with the interruptions and lack of productivity that comes with the territory. And trust me -- it wasn't fun.
3. You will wonder if you're making the right decision
Home prices increased significantly from the time we listed our house to the time we sold, and it led to a little bit of seller FOMO. We knew it was the right time for us to list the house, but seeing the uptick in home prices still led us to wonder if we'd listed our home at too low of a price, or whether we should have waited to see where prices plateaued.
If you list your home in a market with a shortage of housing, you may end up feeling the same as prices increase. What worked for us was to put away the listings and stop obsessing over the prices for other homes coming on the market. You may want to do the same. It gave us the peace of mind we needed to move forward with our plans without the "what if's."
4. Buyers will still try to lowball you
There are some buyers who can't resist looking for a deal, even in a brutal housing market. We still got lowball offers -- despite the fact that the market had less than a month's worth of inventory available to buyers. All we could do was take them in stride. We countered with some buyers and ignored others.
If you're selling a home right now, the good news is that you have the upper hand in the situation, so you don't need to stress over lowball offers. We ultimately opted to wait for buyers who offered a more realistic price for the market, but we also took solace in the fact that there were buyers who were interested enough to make any offer, even if it was absurdly low for the time.
5. Your realtor isn't kidding when they say you need to have a plan in place
Ultimately, it took about three weeks for our home to go under contract. During that time, we started to wonder if the location of our home was insurmountable and stopped looking for potential homes to make an offer on.
That was the biggest mistake we made. When our home went under contract, the buyers were ready to move quickly. They wanted a three-week time frame between contract and closing, and we didn't have anywhere to move to. We talked them into giving us an extra week, but that only bought us a month to find a home.
In our area, rentals weren't an option. Luckily, we were able to find a home and put an offer on it the day it went on the market, but guess what? It was sight unseen. And when we got to the inspection, let's just say it wasn't stellar.
That left us with two options: sink money into a home in need of significant repairs or live in a hotel until we found another option. We opted for the home. That put our mortgage lender in a crunch, and it felt like we were making decisions without really weighing them.
That isn't a great feeling. When your realtor tells you to have a plan, listen. They know what they're talking about. Things worked out for us, but it was pretty iffy for a while, and it would have been a whole lot easier if we'd just listened to the experts in the first place.
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