In 2021, home sellers have had the upper hand in the property market. The limited home supply and low mortgage rates have pushed home prices up, giving sellers a unique opportunity to earn handsome profits on their homes. However, this doesn’t make the process of selling a home free of challenges.
If you wish to sell your home in 2021, here are some key challenges you’re likely to encounter:
1. Setting A Reasonable Home Asking Price
Even in a housing market where supply is low and demand for the home is high, setting an asking price that’s reasonable enough for your home is critical. You’ll need to undertake a diligent analysis of property data in your neighborhood to price your home competitively. Remember that buyers can shun your home even with the high demand for homes if they feel the asking price is unrealistic. The trick is to ensure that your asking price doesn’t pass your competitors by a very high margin and that it’s not too low either. Also don’t forget to refurbish your like get a fresh coat of paint or remove the screws with no heads.
Other than researching the real estate market, work with a credible real estate agent, like Four 19 Properties, to determine a fair price based on the attributes of your home, location, and comparable houses that are currently on sale or have sold recently.
2. Getting A New Home At Affordable Price
After selling your home, you’ll need to get a place to live. If you don’t plan to downsize your living space by moving to a smaller home, you’ll find it challenging to find a home comparable to the one you’re selling. Getting a larger home in the market may also be out of reach financially.
Outrightly owning a large portion in terms of equity might help address this challenge if you’re able to sell your old home for a sufficient price. This will give you some leeway in your budget for buying a new home. If this isn’t the cause, you’re likely to run into problems, especially if home prices in your priority neighborhood are inflated.
To address this challenge, invest time in researching home prices before listing your home. You don’t want to get into a sale contract with a potential buyer only to cancel it simply because you cannot find a new home.
3. Offer Acceptance Vs. Waiting For Bidding War
Due to the limited homes in the housing market, home buyers are consistently outbidding each other. As a home seller, waiting for a bidding war can push the price of your house up. However, if you come across a buyer who makes a firm offer at the beginning, it can complicate the selling process. When this happens, most sellers find themselves wondering whether to accept the offer right away or wait for the bidding war.
Immediately accepting a good offer eliminates the opportunity to entertain other offers during a bidding war. Sellers who choose this option run the risk of selling their homes for a lesser amount than they would have if they waited for a bidding war.
Even so, there are no guarantees that bidding wars always work in favor of home sellers–there are situations where they backfire. With war bidding, there’s always the risk of having the price of your home being driven so high that buyers walk away, leaving you without an offer. To manage the situation, weigh your risk-taking appetite.
Get advice from a real estate agent to know how bidding wars work in your neighborhood. If a realtor tells you that bidding wars in your locality have led to buyers paying more for homes, taking the risk would be worthwhile. However, if realtors paint a mixed picture, consider accepting the more solid offer you get on your home.
4. Strict Terms For New Mortgages
While you’ll make money selling your home in 2021, you’ll need to get a mortgage to finance your new home. However, qualifying for a new mortgage won’t be easy in 2021 as mortgage lenders apply stricter rules during the Covid-19 pandemic.
To avoid disqualification, focus on improving your credit score. You can do this by checking your credit reports for errors and fixing them early. Also, pay any credit card debt you might have and ensure that your bills are paid on time. Maintaining a low debt-to-income ratio will make an attractive mortgage candidate.
Final Thoughts
Characterized by low supply and high demand, the housing market largely favors homeowners this year. But this doesn’t mean that that selling your home in 2021 will be a smooth process–you’ll still face some challenges.
To ensure that you’re not thrown off-guard, prepare to handle the four challenges discussed above before listing your home on the property market.
