Ever since the beginning of the year when the inventory of homes reached an all-time low we have been noticing an important pattern with the homes we are selling. Homes that have some type of condition that in a normal market would have sold at a significant discount are selling for record prices right now. This is one of the few times in real estate you may be able to time the market.
Although the inventory of homes is increasing, we are still in a strong seller’s market which means buyers don’t have many choices. Motivated buyers who would pass over a home if they had 3 other homes to choose from are paying market price for these homes in today’s market.
Many of our savvy investor clients are taking advantage of this market and selling their homes with one of these conditions and using those funds to purchase another property in a 1031 exchange. When we helped these investors buy the homes 2-5 years ago they bought them at bargain prices and now they are selling for market value or higher.
Let’s talk about the 4 types of homes you should consider selling this year before the inventory of homes increases next spring.
Homes Backing To A Commercial Area
This summer we have sold homes that back to an industrial park, car dealership and office complex. Normally buyers are scared off from homes like this due to the expected noise, bright lights and not wanting to look at an eyesore from their back patio. Two of these homes were purchased as new homes and both were among the last homes sold in the community. The sellers were able to negotiate low prices because they were the runt of the litter at that time.
All of these homes sold at great prices, two were sold at record prices for the neighborhood. Many of the buyers did complain about the homes backing to the commercial areas but in the end, there are still more buyers than homes for sale and they all sold with multiple offers.
Homes Backing To A Busy Road
Since the inventory of homes dropped, we have sold several homes that backed to a busy road or highway. What’s interesting about selling homes like this is you often can’t hear the traffic inside the house. The visual effect of seeing traffic seems to be something that is difficult for buyers to psychological be willing to accept.
When buyers are scrolling through listings, they usually check out the home’s location on the map. In a normal market some buyers will pass over homes that back to a busy road. Traditionally the showing activity and number of open house visitors is noticeably lower for homes like this. Without the typical number of homes for sale this year we have noticed the number of showings and overall interest in our listings of homes that back to a busy road to be similar to our other listings which has resulted in these homes selling for higher prices than you would expect in a normal year.
Homes With Water Damage
Buyers can be hesitant about buying a home with water damage. They are concerned whatever caused the water damage will happen again and think that any water damage has turned into black mold.
Due to water pipes busting during the storm earlier this year I expect we will be selling more and more homes that had some type of water damage. In a previous edition I covered how to sell a home with water damage so I won’t get into that here but if that is your situation call us to talk about what you should do.
The good news is right now with fewer homes to choose from buyers can’t afford the knee jerk reaction of passing over a home with water damage. If you were unlucky with the storm this winter you may want to get your home on the market before buyers have more homes to choose from.
Homes With A Bad Floor Plan
This is a big one that most homeowners don’t think about. Often when I ask a client why they want to sell they say they hate their floor plan. The truth is some floor plans are just weird and I have to use all my creativity to explain why something was built the way it was built.
When I ask a client why they bought the house they will say they didn’t love it but it they got a good deal. Chances are if you don’t like the floor plan the next buyer might not be so crazy about it either.
Right now, with limited choices you don’t have to sell a home with a bad floor plan at a discount. Without 3-4 other homes to choose from buyers won’t be able to get a deal when you sell your home.
I’d also include in this category homes with a bad lot. I recently sold a home with a sloped yard, not just from front to back but also side to side. When I researched the sales history that home took forever to sell the last time it was on the market. This year we sold that house for $45,000 over the most recent comparable sale with the same floor plan so there was no discount needed to get it sold.
Bonus #5 – Homes With A Pool
A pool isn’t a defect but if you are planning to sell your home this year or wait until next year and you have a pool you should think about selling this year. The people who teach real estate tell new agents a pool adds about $25,000 to a home’s value. The truth is it depends on a variety of factors and many times the extra value is much higher than $25,000. What we have seen this year is homes with a pool are selling at a significant premium over what we would expect to see in a normal market.
Right now, it’s taking forever to build a pool. Now more than ever buyers don’t want to deal with the hassle of building a pool themselves so they are preferring to buy a home with an existing pool.
Once some of the supply chain issues clear up and pool companies have enough employees to build pools that will change. As soon as buyers feel they can build a pool in a reasonable amount of time the premium you could get for your home in today’s market will disappear.
If you have one of these 5 types of homes you should consider selling your home now when you don’t have to sell at a discount rather than waiting until spring and be selling when there will be more competition. Call us at 512-791-7473 for a no pressure consultation.