6 Ways to Get Top Dollar for Your Home as Interest Rates Rise
- As interest rates creep up, home sellers may have to do more to entice buyers.
- Almost anything you do or spend to prepare your home for sale can be considered an investment.
The trick is to make it hard for a potential buyer to walk away from your house.
If you're currently selling your home, my husband and I are right there with you. It was with some trepidation (on my part) that he accepted a job out of state last week. I realize that 99% of my apprehension has to do with trying to sell a home as interest rates climb.
Whether it's the war in Ukraine or the spike in COVID-19 cases this month, the interest rate can best be described as "unstable." Rates hit record lows in 2020 and 2021 due to the crushing economic impact of the global pandemic. As the number of cases began to wane, interest rates crept back up. Today, the average mortgage rate for a 30-year fixed-rate mortgage stands at 5.183%.
The housing challenge
A look at average mortgage rates over the past 30 years illustrates that 5.183% is still below average, but as a seller, we have a couple of things working against us:
- Mortgage rates averaged 2.96% between January and December of last year, leaving us all a little spoiled.
- The price of homes in the city we're moving to are sky-high, meaning we need to get top dollar on the home we're selling so we can buy another house instead of renting.
Yes, we can rent in the new town, but to be frank with you, I don't wanna. The very idea of moving two more times over the next 18 months or so is enough to make me want to take a nap. And so, I'm focusing on getting top dollar for our current home, no matter what's going on with mortgage rates.
One thing we have going for us right now is a desperately low level of housing inventory. Builders haven't had the materials or labor they need to build up new inventory, baby boomers aren't downsizing the way they used to, and people are generally less willing to put their homes on the market, only to get in bidding wars when it's time to buy something new.
That said, we have something going for us that not every other seller has. We understand the power of making our home stand out from the competition. Here are six ways to do just that:
1. Price it right
Pricing a home in any market can be tricky. Setting the price too high will scare some people off, and setting it too low may mean leaving money on the table. I'm doing two things: Studying how much the homes around ours have sold for over the past two years, and trusting our real estate agent to help us set a price that is both fair and attractive to potential buyers.
2. Listen to your agent
I've written about real estate for decades now, and truth be told, even I find my attitude toward selling agents a little obnoxious. While a so-so agent will tell you what you want to hear, a great agent will broach the tough subjects, including those that might bruise your ego. If your agent tells you to edit your closets so they look more spacious or to take all the family photos down, trust that they know what they're talking about.
3. Stage, stage, and stage some more
Do you know what I like about model homes? I like walking in and being able to imagine that it's mine. That's because there's no kid's art hanging on the refrigerator, no family photos lining the fireplace mantel, and no extra furnishings cluttering the room. It feels clean, spacious, and ready for a new owner.
While professional home stagers possess a keen eye, they're not doing anything most of us can't do ourselves. My husband rented a storage unit last week and we have been filling it up with all things personal. It's not going to be our house for much longer so we need to stop treating it like it is. We've also decluttered each room and closet and either donated or moved anything we don't need for day-to-day life to storage.
4. Create curb appeal
I know there's a temptation to think buyers can't be choosers when inventory is low, but that's not true. They can drive on by your house or pull out of the market entirely. The trick is to create so much curb appeal that they want to stop.
Make sure the lawn is mowed, hedges are trimmed, and fresh flowers are in full sight. We had fresh mulch put down last week, and this weekend we plan to pull out large pots and fill them to the brim with colorful flowers. The cost of soil, fertilizer, and flowers is an investment in selling the house.
5. Make it move-in ready
One real estate agent I spoke with last week told me that what's selling fast (even in this tight market) are move-in ready houses. According to him, few people have the time, energy, or extra cash after buying a home, to go in and make it habitable. While I want my next house to be a hot mess so I can make it my own, I realize I'm in the minority. Our current home still has carpeting in the bedrooms, so we had them professionally cleaned this morning. Window cleaners are scheduled to come next week. We've achieved our goal if potential buyers walk in and find nothing they'll need to spend money on right away.
6. Hide all signs of Fido
Our dogs are members of the family, but there are two good reasons to hide the fact they live with us. One, some people simply do not like pets in the house. Two, some folks are allergic to pet dander and sensitive to pet smells (another good reason the bedroom carpeting was cleaned today).
We plan on making sure the dogs are away from the house with us when there's a showing and that their pet bowls are hidden away. If you have a cat, it's a little trickier, but not impossible. Back when we had a cat, we would put a clean, disposable litter box on the floor of the back seat and drive around with the (usually screaming) creature while the house was being shown. It's a hassle, but preferable to the time our cat trapped a real estate agent in a closet and wouldn't let her out.
Although it feels like a scary time to be buying a house, it's an interesting time to be selling. Hopefully, it's smooth sailing for all of us.
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