Falling Temperatures and Falling Prices: 5 Tips for Selling Now
Last week it was in the 80’s. This week it’s in the 70’s and I’m driving with my windows down. Falling temperatures can often times mean falling home prices as well. We are seeing this currently in our market. Spring came early this year. We were seeing houses fly off the shelves starting in early March. That was great for the intense Spring/Summer market we had but now that schools are back in session, and the temperature is falling, we are seeing a bit of a slow down as well as falling prices.
Over the summer, I didn’t see many price reductions. Buyers were buying whatever went on the market, within reason. They knew that if they didn’t scoop it up, someone else would and Sellers knew they could get by with pricing it high because it was going to sell. Unfortunately, there are still those Sellers who didn’t get in the market a few months ago and they have heard about how much houses sold for in their neighborhood or how much money their friend made on their house and they think they can do the same thing. In some cases they can, however, Buyers in the market this time of year, typically aren’t as “desperate” to get into a house by a certain time so they take their time, and they hold on to more of their money.
Sellers need to make sure they are realistic with their pricing and their expectations. Sales typically take a little longer than they do in the warmer time of year. They also can see that the Buyers aren’t as eager to pay top dollar for their house like the guy that bought the house next door. There are always exceptions, of course, but generally, Sellers will need to have a little more patience and be a bit more negotiable now.
Tips for selling in falling temperatures:
- Hire a Realtor or make sure you know the exact recent sales price of homes around you. Word of mouth is NOT the best way to price your house. Just because your neighbor said the guy down the street sold his house for “x” doesn’t mean he had all the information. What kind of financing, if any, was there? Were there any Seller concessions and what kind of repairs did the Seller have to make prior to closing?
- Just because a house in your area sold for “x” back in February, doesn’t mean you can sell yours for that or more. Appraisers like to use comparable sales within 3 months time. If they need to stretch it, they will go back 6 months but if there are other comparable sales that are more recent, you will have a hard time getting them to use an older one.
- Speaking of appraisals, if your Buyer is getting financing, chances are, they will get an appraisal. If the house does not appraise for at least the purchase price, the Buyer may back out of the contract if they have that contingency in place. In faster markets, a Buyer may make up the difference in cash so the sale will go through. In slower markets, most Buyers are not willing to cough up thousands of dollars when they can wait or buy something else with a more realistic Seller.
- Your house has to look great. In the Summer, people just want a house. They overlook things and sometimes even make rash decisions. Not so now. Falling temperatures seem to make everything slow down a bit – even home selling. Make sure your house has great curb appeal and is sparkling clean.
- Be patient, but be realistic. Your house may take a little longer to get people to look at it. You don’t necessarily need to rush to reduce the price. You also need to listen to the market. If you’ve had no showings and it’s been on the market for weeks, you probably have a price issue.
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur babies, Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.