Although it’s natural for homeowners to reach for that mythical tipping point from which they can sell high and buy low, the market remains unpredictable.
For agents, a scenario in which homeowners anxiously pivot between wanting to sell and wanting to hold out for higher prices is all too familiar.
With a housing market fueled by low inventory and high competition, buyers are waiting for the market to flatten while sellers are frequently delaying in the hope that home values will continue to grow.
Nonetheless, most signs point towards a gradual reversal of steady growth since 2012, into a housing market more favorable to buyers. While it’s natural for homeowners to reach for that mythical tipping point from which they can sell high and buy low, the housing market remains unpredictable at best, real estate agents and economists told Inman.
“Honestly no one ever knows when the peak occurs, nor do they know when the nadir occurs,” real estate veteran Frederick Warburg Peters wrote for Inman. As a result, many are turning to their agents for help on whether waiting a few months will help them beat the market – and looking for expert guidance on this very personal decision.
Here, below, are six ways to help hesitant homeowners to get off the fence.
Share the facts
Information is power — and a good real estate agents should always be armed with the latest knowledge and statistics. Read up on all the latest information about home value growth, interest rate fluctuations, historical data, and market predictions. For example, in San Jose, California, a tech hub with soaring home prices, the average home sells within 12 days while in parts of Texas in the midst of steady job growth, the market is cooling and home prices are dropping.
Across the country, the average home commands $285,700 while new home sales dropped 5.5 percent in September to a low unseen for nearly two years. Meanwhile, 62 percent of homeowners believe their property will be worth more in the next three years and are, according to CoreLogic, feeling growing confidence about the state of the market overall.
For Kati Ross, a RE/MAX Realtor in Michigan, informing clients of interest rates, currently on the rise and expected to be adjusted at least once more this year, has helped motivate them to act.
“For me right now,” Ross said, “using the increasing interest rates for buyers wanting to buy now versus later to save money is a key point to getting my sellers to list without pushing.”
Even in an unpredictable market, facts help clarify the market — so make sure to share them with your clients so they can make informed decisions on whether to sell or buy.
Learn your client’s needs
When a client should sell depends largely on his or her current situation. A growing family may need to move quickly while the owner of a high-end vacation home can afford to wait around for just the right buyer.
As with any other sale, be sure to talk about what your clients want ahead of time. This will ensure the advice you give is at its most useful.
“Getting to the root as to why they are selling will paint a clearer picture,” Karina Eskandary, a real estate agent at Homelife Bayview Realty in Toronto, told Inman. “Once that is established, we can determine what is the best time to sell in the real estate market cycle.”
Provide a realistic outlook on a client’s selling prospects
Setting realistic expectations is an important part of an agent’s job. According to the National Association of Realtors, more than 15 percent of home sales are delayed, renegotiated or canceled due to home appraisals not meeting the contract price.
While sellers will inevitably try to push for a higher price, running comps to put together a comparative market analysis (CMA) and showing similar listings that sold or expired will prevent a situation where a home is overestimated and fails to sell – particularly at a time when many buyers are ‘giving up’ and holding off in the current state of the market.
“The sellers that can recognize this shift has the advantage of pricing their property to sell, rather than over-pricing and having the listing sit and become stale, and eventually selling less than what the market value is,” Eskandary said.
Recognize and address fears
What seems like flip-flopping may actually be fear of making a mistake — a home sale is, after all, the biggest transaction of most people’s lives.
According to Chuck Barbera, a Realtor at RE/MAX Fine Homes in Philadelphia, a common fear is selling a home only to struggle to find a new place to live. As very few people have spare homes to sell, the worry is perfectly valid. But it can also be addressed with facts about interest rates (rising, but still at historic lows) and buying statistics (most buyers find a home in 8-10 weeks).
“They want to take advantage of selling now in the seller’s market, but they are also buyers and concerned about the other end of it,” Barbera told Philly.com.
Another common seller worry is simply the fear of missing out on a better deal, which leads us right into the tip below.
Explain that trying to predict the market is (mostly) a losing game
Despite the abundance of people willing to dole out advice on the best time to sell, no one really knows what’s going to happen in the future. According to experts, the perfect housing peak of buying low and selling high is a myth — and waiting for it more often than not results in being priced out.
“If anything a buyers market will cause more negotiating price and buyers being more particular,” Ross said.
Do not push
While it can be tempting for agents to start projecting their views and knowledge on their clients, you should always be encouraging rather than insistent. It is their house, after all.
“An agent should be in an advisory role to work with the seller’s needs, and should never push someone to sell,” Eskandary said.