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The Cost of Overpricing Your Home
If you’re thinking of selling, you may run the risk of overpricing your home. From Zestimates to banking on what one neighbor’s home sold for, it can be tempting to overprice your home based on what you might make. But this can come at quite a cost. Learn about five common challenges that come with overpricing your home.
1. Missing the mark with potential buyers
If your home is overpriced, potential buyers will not run across your listing in their home search. While they are searching based on a specific price point, your home at the higher price point will stay off their radar. With today’s interest rates and rising home prices, buyers are cautious about staying within their budgets.
In addition, the buyer’s real estate agent will know the local market. If a buyer’s agent believes a home is overpriced, they will not want to waste time showing it to clients.
2. Deal with buyer financing problems
Even if you do find an interested buyer for your overpriced home, the buyer will most likely require financing. Lenders require an appraisal on the value of the property to ensure they are not distributing a loan for more than the home is worth.
If the appraisal comes out below asking price, the buyer will need to either make up the difference in cash or risk the bank being unable to finance the loan. That final financial toll could be the last straw and cause a buyer to walk away from the deal.
3. Spend more days on the market
Overpricing your home will result in the high probability that your home will spend more days on the market. The combination of less visibility for qualified buyers and less agent effort towards showing overpriced homes, could result in less showings. That, in turn, will lead to less offers. The longer the home sits on the market, the more buyers question why that’s the case and may steer clear of it.
4. Forced to do price reductions and eat extra costs
To drum up offers and interest, some sellers of overpriced homes have to do a price reduction. This can have positive and negative effects. On one hand, reducing the price should make it visible to more buyers at the proper price point. However, the price reduction could cause a buyer to wonder if there are issues with the home since it’s been listed for a long time.
Furthermore, you as the homeowner are still responsible for the upkeep of the home during this time. Mortgage payments, utilities, cleaning and yard maintenance are still your responsibility. They can eat into the profits of the eventual home sale, along with the price reduction.
5. Expect lowball offers
An extended time on the market coupled with a price reduction (or multiple price reductions) are prime targets for buyers to give lowball offers. As the seller, you may be forced to accept the lower offer out of desperation or because the interest has waned so much on the property. You run the risk of this lowball offer being even worse than if you had listed the home at market rate from the start.
Steps to take to avoid overpricing your home
There are steps you can take to ensure you do not overprice your home.
1. Use a qualified real estate agent
First and foremost, find a qualified real estate agent to sell your home. Pricing your home correctly for the local market is a crucial part of the home-selling process. Windermere Silverdale’s team of experts are here to help. They’re highly rated, know Kitsap County’s real estate market, and have top tier inspectors, home stagers, photographers, and more.
2. Get a free Comparative Market Analysis (CMA)
Your real estate agent will be able to accurately price your home for sale by evaluating similar properties. This is called a Comparative Market Analysis (CMA). The report will look at properties with similar features (square footage, bedrooms, bathrooms, etc.) that have sold in your area. Using data from the CMA should ensure your property is priced properly, and you’ll be able to make data-informed decisions to achieve your goals.
3. Complete home upgrades that add value
The CMA could also uncover upgrades that would be worthwhile prior to listing the home. If you don’t have the cash up front to invest in home remodeling projects prior to selling, check out the Windermere Ready program.
Working with your real estate expert, you can decide which home upgrades will add the most value to your home before it goes to market. Strategically preparing your home for sale is one of the best things you can do to get your asking price.
8 DIY Projects to Improve Your Home’s Curb Appeal
Whether you want to sell your home or enhance its exterior, we have some easy DIY projects to help you get started. Small investments in your curb appeal can have a positive impact on your home’s value and appreciation. Your home, at a glance, can leave a lasting impression. Here are eight ways to make it really stand out.
1. Upgrade your front door
There are three exterior upgrades with a high return on investment: painting the home, replacing the siding, and upgrading your front door. Start with the easiest one, which you can do yourself. You can upgrade your front door by replacing it or by adding a fresh coat of paint. Either way, a beautiful front door makes a statement before anyone enters your home.
2. Update the front porch
A well-thought-out front porch will also boost your curb appeal. First and foremost, if there is room, consider adding outdoor furniture. Seating invites others to enjoy your outdoor space. A few potted plants can also brighten your home’s exterior. Another way to improve your porch is to add outdoor lighting. Finally, lean into each season by decorating it for special holidays. A few colorful throw pillows that say spring, or a festive holiday wreath, will welcome guests and/or prospective buyers in a thoughtful way.
If you’d like to stretch beyond DIY projects and get a professional involved, consider hiring someone to install railings or expand your porch, if possible. For more inspiration, check out these front porch ideas.
3. Elevate front yard landscaping
As you plan your front yard landscaping, make sure to consider the grading and drainage of the property. You will want to ensure water flows away from the home. Also, make sure you choose plants conducive to living in the Pacific Northwest. Native plants, or those that occur naturally in a region, preserve biodiversity. Additionally, you’ll want to consider these landscaping rules when planning how to spruce up your front yard.
4. Plant flowers
Window box flowers can add a charming, refreshing glow to your home’s exterior. Additionally, flower beds in front of the porch or along the driveway can add to your property’s aesthetic. This article contains tips from a professional about color pairing, proper companion planting, and more. Or, check out these inspirational photos of container gardens.
5. Invest in driveway enhancements
When approaching your driveway, consider what enhancements would fit best at a distance. For decorative elements, you may want to consider purchasing a fountain to add a pleasing acoustic element to the space. Or, a new gate might really improve your driveway. You may want to hire a professional to put in a motorized gate. However, if your space is smaller, decorative fencing that is low or waist-high should be a doable weekend DIY project.
6. Create a functional pathway design
First and foremost, ensure the path is clear and free from overgrowth. A simple push of the broom or power washing can do wonders to make the driveway and paths look clean. Trim back any existing bushes and keep lawns mowed. Make any necessary repairs to keep the property functional and looking its best.
There are many DIY projects to improve the look of the main pathway to your front door. Edging can create an outline that guides visitors to your door and creates zones within the front of the property. Installing pavers or stamped concrete can build a clean line into the property. Watch the video below to see if this appeals to you.
7. Make your house number stand out
A house number DIY project is pretty simple yet effective. You’ll want to make sure the style you choose is large enough to easily see from the street, and that it’s well-lit. Check out these inspirational house number ideas. Consider using tiles, mosaics, stencils, or metal. There are many great ways to make it stand out.
8. Illuminate your home’s curb appeal with a well-lit path
Outdoor path lighting makes your home more inviting, creates a cohesive look at night, and makes it easier to navigate, especially if you have steps to your front door. That warm glow will illuminate certain features, such as a fountain, an expansive front porch, or a curving walkway adorned with flowers.
If you thoughtfully plan out how you want to improve your home’s curb appeal, you’ll soon have a refreshed exterior that wows anyone who stops by. You’ll also be able to enjoy your home even more. If you’re thinking of selling, these changes can definitely make a difference.
The Home-Selling Timeline & Mistakes to Avoid
The home-selling timeline can vary greatly due to factors like market conditions and how well your home is priced. However, if you follow these general steps for selling a home and avoid common mistakes, there is a greater chance of selling your home faster and for top dollar.
Use a well-qualified, local agent
A well-qualified agent will serve many purposes in your home-selling journey. First and foremost, they will know your local market. They can do a Comparative Market Analysis (CMA) and will price your home correctly. Great local agents often know excellent local vendors who will help prepare your home. In addition, they have access to the MLS (Multiple Listing Service), which will broadcast your home to numerous buyers agents.
Prepare your home, and don’t leave it to chance
Before listing your home, make sure you’ve addressed all home maintenance needs. A pre-listing inspection is a valuable tool. It can determine areas of the home that need attention. Also, check out this list of home maintenance projects you shouldn’t put off. Your home-selling timeline will go much faster when you’ve already cleaned gutters, checked your roof, ensured there aren’t any pests, and made necessary repairs.
Your agent can also determine the value of larger home projects. Together, you can decide if it’s worth the time and effort to make various improvements. Updating the kitchen, replacing an old front door, or even improving the home’s curb appeal could be profitable. If you need funds to finance a project, consider the Windermere Ready Program. This program fronts the costs of the home improvements for Windermere clients. Through this program, you don’t have to pay back the loan until the home sells.
Finally, staging the home can significantly impact the appeal of your home. While it involves upfront costs, according to a survey done by the National Association of Realtors, it often results in homes selling faster and for more.
Show your home, but don’t stick around
Once your home is listed for sale, your agent will begin showing it. It is best to leave the home and remove pets during showings. Keep the home neat and tidy so potential buyers can envision themselves in it. Ensure your valuables are safe, and put miscellaneous items away.
Carefully review offers, and don’t accept just anything
You might receive multiple offers. Review each offer carefully with your agent. Consider your personal timeline, financial needs, and other benefits of each offer before choosing one.
Understand agreements, and don’t forget the addendums
Once you’ve accepted an offer, you and the buyer will enter into a sales agreement. This will outline the details of your property transfer. It is very common for sales agreements to include multiple addendums. Financing, inspections, and condition reports/disclosures are common addendums. Depending upon the situation, there might be a contingency addendum and other special condition addendums.
Be prepared for escrow, and don’t ignore the deadlines
The process will move to escrow once disclosures, a home inspection, and any repair negotiations are finalized. Stay in constant touch with your lender (if financing the home), the escrow company, and your real estate agent. You will need all of them to finalize financing, close on the home, and prepare legal documents such as the title to the home. Keep careful track of any documents that need to be submitted, signed, and/or notarized to keep the home-selling timeline on track.
Reap your rewards, but don’t be surprised by home-selling fees
Hopefully, selling your home will result in a net profit. However, don’t be surprised by the fees associated with selling a home. State taxes, inspections, and existing home loans are all factored into your estimated net proceeds. Your real estate professional can explain other fees you may face as well, such as brokerage fees.
Come to closing, and don’t forget your ID
Bring all required documentation and identification when it’s time to come to closing and sign the final paperwork. Oftentimes a notary public will also be present to witness the signing. Any fees that are due will be expected at this time. Then, upon completion of closing, everything will be recorded.
Don’t forget to enjoy what’s next
While preparing a home for the market and selling it can be stressful, don’t forget to look forward to your next steps. Perhaps you’re downsizing and can look forward to having a smaller space to maintain. Or, maybe you’re relocating for an exciting new job. Whatever the case may be, don’t forget to enjoy the positive aspects of the experience and all that comes next.
If you are in the process of selling your home and buying a new one at the same time, consider a Windermere Bridge Loan. It allows you to access the equity in your home to put a down payment on your next one. Although the requirements for a bridge loan are more stringent, they are definitely something to consider if you want to increase your competitiveness as a buyer.
We wish you the best of luck in your home-selling journey, and all that lies ahead!
Thinking of Selling? Home Maintenance You Shouldn’t Put Off
If you’re thinking of selling, there are certain home maintenance projects that shouldn’t be put on the back burner. By keeping up with a year-round home maintenance schedule, you reduce the likelihood of unexpected, expensive home repair projects before selling. From roof damage to problems with home appliances, no one wants to deal with a long list right before putting your home on the market. So, we’ve compiled this handy list to help you take a preventative, proactive approach.
Where to Begin with Home Maintenance
A great place to start is this comprehensive annual home maintenance schedule released by the U.S. Department of Housing and Urban Development. Many home maintenance tasks should be completed in the fall and spring. Therefore, now is the perfect time to prepare if you want to sell soon. If you’re looking to sell next year, the spring checklist will also be helpful.
Additionally, a comprehensive pre-listing inspection is very valuable. It can identify any home repairs you should do before listing. By doing so, you’ll avoid unwanted surprises during the final inspection.
As a homeowner, your pre-listing inspection and home maintenance needs may vary. However, do not skip these essential home maintenance projects before selling.
Repair the Roof and Clean the Gutters
It is essential to keep up with your roof’s maintenance so it lasts its full lifespan. A roof replacement is a costly home project. Regular maintenance can ensure it doesn’t become a major project too soon. First and foremost, check for any signs of leaks in your ceiling or attic. These are the first signs that something is amiss with the roof. Also, check for missing shingles periodically or after a storm to make sure water and moisture cannot get into the home.
While you’re on the ladder inspecting the roof, clean out those gutters. Clear out any debris such as leaves or pine needles that may inhibit proper water flow off the roof onto the ground. Your local hardware store has downspout extensions so water doesn’t pool around your home’s foundation. This is particularly important in our rainy, Pacific Northwest climate.
Ensure Plumbing is Functioning Properly
Check and maintain all plumbing fixtures in the home before putting it on the market. Examine all of the spaces where water damage can occur. Look under sinks, around bathroom tubs and showers, under the washer, and around the dishwasher and refrigerator. Signs of water damage include peeling paint, water stains, and damaged flooring. It’s best to catch any signs of water damage early and repair them quickly to reduce the risk of further damage to the home.
Additionally, examine your water heater and make sure it’s in good condition. If you’re unsure, pay attention to these signs that your water heater is failing: inconsistent water temperature, insufficient hot water, weird sounds, leaks, and water discoloration.
Check Foundation for Signs of Wear and Tear
Monitor all signs of a potential issue with a home’s foundation. If you have any concerns about the integrity of your home’s foundation, seek out a professional. It’s important to note there are different types of foundations. Homes that are in areas that receive more precipitation (such as the Pacific Northwest) may be more susceptible to foundation damage. Before preparing to sell your home, check out this article to learn about common signs of foundation problems.
Eliminate Pests
Preventative pest maintenance is a must, especially going into the winter season. Rodents often look for warm spaces as the weather cools. So, do your best to seal off potential entry points into your home. Prune back branches so they’re away from the sides of your home and not encroaching on the roof of your house. Don’t store anything in the crawl space since it might attract critters. Finally, monitor your attic for any signs of rodents and keep it as clean as possible. Should you hear scuttling noises or suspect rodents are inside the home, call a professional and take action as soon as possible.
Check and Service Appliances
A home is full of major appliances that need to be serviced and regularly checked. Some appliances can be cleaned and serviced by the homeowner, while others may require a professional to do an annual inspection. Cleaning and replacing filters around the home is also important. Smaller items such as carbon monoxide alarms and smoke detectors need to be in good working order. Review this comprehensive checklist from Better Homes and Gardens to see which appliances you may need to get serviced or have replaced.
Year-round home maintenance is a must. However, it can be difficult to make time for every project and item on your to-do list. So, try focusing on home maintenance projects that impact the integrity of your home, prevent costly issues, and matter most to prospective buyers. As a future home seller, investing in your home in small ways now will lead to financial rewards later. With thoughtful planning and a great real estate agent, you will be able to sell your home faster and for a higher price point.
Buying and Selling Simultaneously: Your Questions Answered
Going through the process of selling a home is often an emotional, time-consuming endeavor. Buying a home is a complex process as well. Doing both at the same time can be challenging. If you’re contemplating doing both, it’s best to know what your options are to help ensure the process goes smoothly. Buying and selling simultaneously requires staying on top of many different tasks. It’s always helpful to work with an experienced, local real estate agent who can project manage, utilize their network of trusted local vendors, and serve as your advocate. To help you get started, we have answered some common questions.
Should I buy or sell first?
The answer to this question really depends on what you think will make your life easier. Starting the selling process first is most beneficial from a financial perspective. Once you sell your home, you’ll have more cash on hand. This improves your overall financial health by paying off your mortgage and increasing your available down payment. But if you do sell first, you will need a place to stay until you can find your next home to purchase. Or, you may be able to negotiate a rent-back agreement with the buyer. This allows you to temporarily rent the house. While renting, you have more time to pack and find a new home.
If you start with the buying process, then renting back your home isn’t necessary. You’ll be able to pack up all your belongings and move into the new place. But this transitional simplicity can lead to more financial hurdles. If you haven’t sold your house, then you may be juggling two mortgages. This can impact your loan terms by carrying more debt. Plus, gathering enough for a down payment could be challenging. If your down payment is less than twenty percent, obtaining private mortgage insurance (PMI) may be necessary. Lastly, buying first works best if your current house sells quickly. If, for some reason, it doesn’t, a bridge loan might be an option. Bridge loans can cover the down payment on a new house and are repaid once your existing home sells.
Should I accept a contingent offer?
Deciding whether to accept a contingent offer really comes down to timing. There’s no guarantee that the buyer’s home will sell fast. This is especially true if they currently live in an out-of-state housing market where you may be less familiar with what’s hot and what’s not. Consequently, if you’re hoping to sell your home quickly, then it’s best to include a timeline in the contingency agreement. This ensures everyone is on the same page and gives you an out if their selling process drags on.
Accepting a contingent offer also depends on the level of interest in your home. If your house isn’t attracting many potential buyers, a contingent offer might be a good option. That said, there’s always the possibility that you accept a contingent offer and then receive another offer. Thankfully, it’s easy to prepare for this scenario. Simply include a “bump” clause. This allows you, the seller, to accept the offer, but continue showing your house to prospective buyers. If you receive a tantalizing offer without contingencies, you can “bump” the first offer. Typically, you include language that gives the first buyer an opportunity to respond and waive the contingency and/or offer more, depending on the scenario. Always make sure you include a time frame in the “bump” clause to require the first buyer to respond. If you don’t receive a response, you can legally back out of the contract and pursue the new offer. Regardless of which direction you go, it’s best to come up with a clear and transparent plan of action.
Should I buy a home with a contingent offer?
Purchasing a home with a contingent offer really depends on the local housing market. If the neighborhood you want to buy in is highly desirable, a contingent offer most likely won’t be enough to secure the house you want. As a result, sellers may be reluctant to accept or will require a “bump” clause, as mentioned above. In this situation, to have the best chance, you may have to make an offer outright.
If you are house shopping in a more relaxed market, a home sale contingent offer has benefits. This type of offer allows you to transition easily between houses. It’s a great way to avoid renting temporarily or placing belongings in storage. Once your home sells, another awaits your arrival.
Should I stage my home?
Yes. While staging a home might seem daunting, it’s definitely worth it. Staged homes typically sell faster and for more money. This is always a plus, especially if you are buying and selling simultaneously. Also, you have to consider how people look at homes today. Most buyers look at them online first. A staged home draws people in with enticing photos. Staging your home is the best way to attract buyers and help them take the next step. For more information about the selling process, check out our tips when preparing to sell.
Is now a good time to buy and sell?
Based on what we’re seeing in the Kitsap County real estate market, we think the answer is yes. The average sale price in the second quarter was $694K. While the number of sales is down overall, sellers are still receiving 100% of their asking price. We’re moving toward a more balanced market so buyers don’t tend to be in such competitive situations compared to the height of the pandemic when there were many multiple offer situations.
The best way to achieve your real estate goals is by working with a local real estate agent who can negotiate effectively on your behalf. Our Brokers are highly rated and very knowledgeable. Check out these home-buying tips and insights from a few of them. Contact us, and we’ll help you get started with the process of buying and selling simultaneously.
Home Improvement Projects That Add Value
As summer approaches and the days are sunnier, you may be looking at your home in a new light. What appeared to be great in winter now seems tired and in need of refurbishing. If you are contemplating starting home improvement projects that add value, it might be helpful to know what renovations return the most at resale. Before spending thousands of dollars, consider the West Coast’s average recoup values. Below are the top four renovations that yield a high return on your investment for 2023.
Electric HVAC System Conversion: 104.8% Cost Recouped
While not the most exciting project, converting your HVAC system from gas to electric adds value to your home. Appliances powered by natural gas have been banned or restricted in new buildings by several major cities, including Seattle, to reduce pollution and climate change. So if you decide to make the change, you will be ahead of the curve.
Regardless, before making a decision, take time to consider all the pros and cons. Overall, moving away from natural gas is safer. Without gas, there isn’t a risk of carbon monoxide poisoning. And electric HVAC systems tend to be cheaper than gas to install and run more quietly. Yet, keeping an electric heater running in winter tends to cost more. If you do decide to make the change, know that it’s a complicated process and not a DIY project. It’s best to hire a professional for this home improvement project because it impacts the wiring and connectivity of your whole home.
Siding Replacement: 98.3% Cost Recouped
Siding replacement is a home improvement project that can make your life easier in the long run. Vinyl siding is very low maintenance, doesn’t need painting, and is low cost compared to other types of siding. Thanks to the durability of vinyl siding, you don’t have to worry about chipped paint, and dirt easily washes off. It also tends to last decades, with time frames varying depending on the weather.
To further consider this specific project, check out the pros and cons of vinyl siding. In general, it’s popular and will give your home a great new look. It’s even been proven to better insulate homes and decrease energy costs. If you plan on selling your home in the near future, pick a vinyl siding color that boosts your home’s curb appeal.
Garage Door Replacement: 96.8% Cost Recouped
Garage doors are constantly being used multiple times a day and are destined to experience wear and tear. Additionally, the outside of the garage door is continuously being exposed to the elements. Whether you want something that works better or are interested in a technology upgrade, or need to replace rotting wood, replacing your garage door is a worthwhile investment. That said, it’s not necessarily as simple as you might think. So, to get started, consider these top questions to ask yourself regarding material, whether or not to hire a professional and more.
Entry Door Replacement: 88.7% Cost Recouped
Coming in fourth on the list is replacing your front door with steel. While wood doors are lovely and offer a classic style and quality, they aren’t truly timeless. Installing a new steel entry door delivers long-lasting beauty with increased durability. A steel door is also more energy efficient and provides greater security. A brand-new steel door is a solid investment, especially if your front door is old and tired, and there are many steel door options to consider.
Hopefully, this list sparks some ideas. As you evaluate the best home improvement projects that add value and are right for you, take time to also consider if you need to address any urgent home repairs as well. And, if you’re looking for some great gadgets to increase your home’s cool factor, this list has fun ideas.
8 Tips When Preparing to Sell
Preparing to sell your home can feel overwhelming, so we’ve compiled some useful bits of advice to make sure you’re on your way to a job well done. From pricing to staging, there are many factors to keep in mind. We’re here to make the selling process smoother and more successful. Read on to gain helpful tips you can use today.
1. Determine your moving timeline
Begin the home selling process by examining your personal timeline. Are the dates flexible or are you on a set schedule? Knowing the answer to these questions will help you make the right decisions regarding the repairs and home projects you should complete. Additionally, it’s important to establish clear expectations with everyone involved, including your local listing agent.
2. Consult with a listing agent when preparing to sell
A knowledgeable listing agent will guide you through the process of selling your home. They will provide you with up-to-date information including local market trends so you can make well-informed decisions. In addition to listing the home, the agent will show the property and coordinate all aspects of the real estate transaction. It’s important to take your time and find someone you work well with and trust.
3. Get a Comparative Market Analysis (CMA)
A real estate agent will be able to conduct a Comparative Market Analysis or CMA. A CMA is a detailed report that compares your property to similar listings in the area. It allows the agent to examine market trends and determine an appropriate list price base on other nearby homes. It will also help you determine if any potential upgrades or remodels will be worthwhile.
4. Complete upgrades with a high return on investment (if it makes financial sense)
After consulting with a listing agent and looking at a Comparative Market Analysis, you’ll want to consider completing home upgrades with a high return on investment. Take into account your moving timeline and the risk/reward of doing certain upgrades. Your local real estate guide will be able to discuss all options with you to see if the projects are worthwhile.
5. Conduct a pre-inspection when preparing to sell
Did you know a seller can conduct a pre-inspection before listing the home? This inspection will identify any repairs or problems that may need to be addressed before selling. Also, providing a buyer with a pre-inspection can create a sense of trust. Being upfront about the condition of the home demonstrates transparency.
6. Identify and make necessary repairs
After consulting with a listing agent, and examining the CMA and pre-inspection, it is time to get to work. Ensure the home has all major repairs completed before listing and showing it. Repair all roof leaks or missing shingles, and ensure there are no plumbing or gas leaks. Check that the home’s foundation is solid and repair any electrical issues. Finally, make sure all pest control measures have been completed prior to listing. If there are any potential red flags regarding your property, this is the time to address those issues.
7. Consider the Windermere Ready Loan Program
If making repairs and preparing the property for selling seems daunting due to the upfront expenses, consider the Windermere Ready Loan program. This program offers up to $50,000 in expenses incurred. It is a six-month loan with no payments due during that time. It is then paid off in one lump sum once the property is sold. Many home sellers and their agents have reported success, saying that the program helped them sell their homes for more and in less time.
8. Stage your home when preparing to sell
According to Forbes, staged homes sell 87% faster than non-staged homes. Staging allows prospective buyers to easily imagine themselves in your home. It presents homes in an enticing way. And, the majority of buyers look at homes online first, so excellent photos of well-staged spaces can make a huge difference in the number and types of offers you receive.
Listing and selling a home is a labor-intensive process that requires a team effort. Our local Windermere experts are here to help you sell your home efficiently and successfully.
The Benefits of Selling in Winter
Are you having doubts about selling your home in winter? While the real estate market has begun to shift and tends to cool with the weather, there are still advantages to selling this time of year.
Supply and Demand
2021 was an unusual year because supply was extremely limited, demand was very high, and interest rates were very low. While interest rates have increased a great deal this year, the supply of houses for sale overall remains low. In Windermere’s Gardner Report for Western Washington, our Chief Economist Matthew Gardner notes that in this year’s third quarter “King and Kitsap counties were the tightest markets in Western Washington, with homes taking an average of 19 days to sell.” While we’ve seen more listings come on the market recently, there are still many serious buyers out there. Gardner says the market is shifting toward buyers but it’s still a seller’s market and the market is normalizing overall. And, when it comes to selling in winter, as Windermere Silverdale’s Branch Manager Nancy Mackleit explains, “It doesn’t matter what time of year it is, there are always sellers that need to sell and buyers that need a home.”
Home Prices Remain Solid
In Q3 of this year, the average sale price was $649K and the percent of list price received was 98%. Many people still want to move to Kitsap County, and the fact that we’re just a ferry ride away from Seattle with significantly lower home prices than the Emerald City benefits local home sellers.
Selling in Winter Means Less Competition
Typically, spring and summer are the busiest seasons for the real estate market. This means that for winter home sales there aren’t as many houses listed, creating a tighter market with fewer options for buyers. With fewer listings, your home has a greater chance to shine and wow potential buyers. Take advantage of the holiday season to highlight all your home has to offer. Decorate with fun outdoor lights and create cozy spaces inside to set your home apart and give buyers a welcoming respite from the cold. They’ll feel at home before it’s even theirs! Plus, winter is a great time to showcase things like excellent energy efficiency features such as a smart washer, a smart thermostat, or dual-pane windows.
Serious Buyers are Motivated
Typically, people aren’t out house hunting in winter just for fun. Not only is it cold, but it’s also a busy time of year with the holidays, visitors, and winter vacation plans. In winter, the people who are out looking at homes are serious buyers. Often, they need to relocate for a job or a growing family. Regardless of the reason, there is a level of urgency involved, which can benefit sellers.
Smooth Closing Process
With fewer winter home sales as compared to spring and summer, typically everyone who has a role in the transaction process has more availability. This includes appraisers, home inspectors, mortgage lenders, and escrow officers. For sellers, this is great because it’s easier to reach people, make appointments, and close the deal faster and more seamlessly.
If you’ve decided that winter is a good time to sell your home, contact one of our experienced real estate agents to help you get started.
Selling vs. Renting Your Home – What to Consider
You’ve decided to move, but that still leaves the question about what to do with your current home. Is it better to sell or rent your home? This is a big decision that can create additional stress. The answer depends on a variety of factors including your financial situation, the local housing market, and what’s right for your life overall. As you weigh the options of selling vs. renting your home, take time to consider the pros and cons of each scenario.
Your Financial Situation
When it comes to deciding whether to sell or rent your home, the most important consideration is your financial situation. Take time to review your finances and get a better understanding of your overall financial health. If you are planning on purchasing a new home and need additional cash to pay for it, then selling your home is probably best. The sale of your home will provide the funds you need for a new down payment.
If you don’t need to sell your home to cover a new down payment or if you own your home outright, then renting your home may be a good option for you. It’s a way to bring in additional income, as long as the rent you’re able to charge is more than your monthly mortgage payment. But remember that money brought in from rent is considered income and counted as part of your overall finances when applying for a new mortgage and during tax time.
Local Housing Market
The local housing market plays a big role in determining what’s best for you when it comes to selling vs. renting your home. If local rental rates average below what you still owe on your mortgage, it’s probably best to sell. You don’t want to be in a position where you are losing money by taking in a monthly rent payment that’s lower than your monthly mortgage.
Also, if you purchased your home a while ago and the value has increased significantly, you may want to take advantage of selling your home at a much higher price. This is especially worth it if you are able to exclude up to $250,000 of capital gains on your taxes from the sale (or up to $500,000 for married couples). To take advantage of this, the home you’re selling must be your primary residence for at least two out of the last five years. There are several nuances to the capital gains tax, so be sure to research it thoroughly before moving forward.
Determining Rental Rate
If demand is strong for local home rentals and monthly rates are higher than your mortgage payment, renting could be a good option for you. It’s a great way to bring in additional income without investing a lot of time. Also, it’s a nice way to be able to keep your current home if you’re not ready to let go of it. Typically, homeowners determine the rental rate using the 1% rule, which is based on the current property value. For example, if your house is worth $250,000, then the amount of rent usually falls between 0.8% and 1.1%, or approximately $2,500 a month based on the 1% rule. This is a great way to come up with a ballpark number. Then depending on a variety of other factors, you can determine if you should raise or lower that number based on local market conditions. Here in Kitsap County, rentals remain strong, and Washington state vacancies remain below the national average. Watch the recent video below to learn more about Kitsap’s rental market.
Your Overall Lifestyle
Lastly, you must consider whether selling or renting your home is the best match for your overall situation, lifestyle, and personality. If you’re not excited about being a landlord and it sounds more like a hassle than an investment, selling is probably the right choice for you. Let’s face it, fielding calls from renters takes time. And, while everyone likes to think their home is in perfect condition, the reality is that things happen. What if the toilet stops working, what if the garbage disposal breaks, or what if the faucet starts leaking? What if one of these things happens while you are on vacation? As a landlord, there are many potential issues that you may have to address. If this sounds unappealing to you, selling may be best.
Being A Landlord
If you don’t mind being a landlord and look forward to working with tenants, renting could be a great option. Just keep in mind that home repairs cost money and it’s best to keep $10,000 to $15,000 on hand for unexpected expenses. Also, if you are planning on moving out of the area temporarily to take care of family members or work elsewhere, be sure to clearly communicate your return timeline with tenants and have someone dependable lined up to oversee the property and handle any possible tenant or maintenance issues that may arise. You may also want to think about using a property management company so that they can find good tenants for you, manage repairs, be on call, manage any legal issues, etc.
In the end, selling vs. renting your home is a very personal decision with many nuances. If you decide to sell, we have experienced, highly rated, local real estate experts here to help you. If you decide to rent out your home, our local Windermere Property Management office here in Silverdale is ready to help.
Home Sellers’ FAQs: CMA, Contingencies, Inspections, and More
If you’re considering selling your home in the near future, you most likely have questions about certain aspects of the process. Read on to find the answers you’re looking for in our home sellers’ FAQs.
Comparative Market Analysis
What is a Comparative Market Analysis?
A CMA is a detailed report that estimates your home’s value by comparing it to similar properties that have recently sold in your area. Generally, a Comparative Market Analysis is prepared by your real estate agent. For a complete report, the agent inspects your home and then researches similar properties in your area. They also examine regional market trends to determine your home’s value.
How do I get a Comparative Market Analysis?
Simply contact your real estate agent and make an appointment. And don’t worry, there’s no need to spend a lot of time cleaning in preparation. Just make sure your home is in good condition. This allows the agent to properly assess its worth. If you don’t have an agent, one of our agents can provide a free analysis.
Is a CMA worth doing?
If you want to know how much you can sell your home for, then yes! A Comparative Market Analysis determines this information. This knowledge empowers you to make informed decisions and sets you up for success moving forward. You’ll be able to set a listing price based on what other homes in your area are selling for right now. Additionally, a CMA helps you figure out if potential upgrades and remodels are worth doing to make your home stand out to buyers.
Appraisals
Is an appraisal the same as a CMA?
No, an appraisal happens further into the process. Once a buyer is identified, their mortgage lender will require an appraisal. The appraisal ensures the bank isn’t lending the buyer more money than needed. Appraisals must be performed by licensed or certified appraisers who determine the value of your home using similar methods to a CMA. Typically, the cost of an appraisal is paid for by the home buyer.
Pre-Listing Inspection
Is a CMA different from a pre-listing inspection?
Yes, a Comparative Market Analysis is done early on to determine your home’s value. If done, a pre-listing inspection takes place before putting the home on the market to make sure it’s ready for potential buyers. During a pre-listing inspection, a professional home inspector examines your property and identifies potential repairs and any problems that may need to be addressed before selling.
Should I get a pre-listing inspection?
If you want a streamlined selling process, a pre-listing inspection can be helpful. By addressing needed repairs before listing, you will eliminate any surprises that could scare off potential buyers. Pre-listing inspections also increase efficiency and transparency with buyers. By presenting a pre-listing inspection up front, buyers understand a home’s condition and see that you have nothing to hide. This increases buyer trust and can expedite the process by eliminating the need for a buyer’s inspection.
What if I don’t have the funds to make recommended repairs/upgrades before selling my home?
The Windermere Ready Program may be able to help by providing a loan of up to $50,000 in needed repairs/upgrades. A Windermere agent helps strategically prepare your home for the market by identifying high-impact updates and helping you through the process. This program can help you sell your home for more and in less time.
Real Estate Contingencies
What are real estate contingencies?
Contingencies are certain requirements that must be met for an offer to become legally binding. If certain conditions aren’t met, the applicable contingency gives the buyer and/or seller the legal right to exit the contract. Sometimes buyers make an offer with contingencies attached.
Are real estate contingencies common?
Yes, contingencies are often part of the offer process to protect the buyer’s interests. Common contingencies include requiring certain actions to be taken such as a home inspection or an appraisal before finalizing the sale. Read more about common contingencies to better understand what to expect.
What is a home sale contingent offer?
This is when a buyer makes an offer on your home, but the final sale is contingent upon the buyer selling their home. If accepted by the seller, this type of offer gives the buyer “first dibs” on your house.
Should sellers accept home sale contingent offers?
That’s really up to you. If you are on a tight timeline and would like to sell your house quickly, you can include a “bump” clause. This will allow you to keep showing the property. If you receive a new offer, the first buyer has a specified time frame to decide whether to move forward with their contract.
If a Buyer Backs Out
What happens if a buyer backs out?
This depends on the terms of the contract. Typically, once your agent and the buyer’s agent have worked to agree on purchasing terms, the buyer will place earnest money in escrow. If a buyer backs out for a reason not stipulated in the real estate contract, those funds usually go to the seller. If a buyer backs out for a reason that is stipulated in the contract, then the funds typically remain with the buyer.
How can I protect myself in this scenario?
The best thing to do is work with your real estate agent to fully understand the terms of a buyer’s offer. With this knowledge, you will be better prepared if various scenarios transpire. Also, if certain conditions make you uncomfortable, it’s your right to decline an offer or make a counter offer. You can also have the option of accepting backup offers. This way, you’ll have another offer lined up if the first buyer backs out. Talk to your real estate agent about these various options. A great real estate agent will possess the expertise and guidance you need to make well-informed decisions.
Staging Your Home
Do I need to stage my home?
This is one of the most common home sellers’ FAQs. Even though it’s still a seller’s market in Kitsap County, staging your home will help you put your best foot forward. Overall, staging reduces how long your home is on the market, increases potential offers by 1 – 5%, and helps ensure an excellent first impression online and in person. Remember, buyers are searching for homes online. If you want them to take the next step and tour your home, then your property should look very appealing and move-in ready. Overall, staging is worth it, even if there are costs involved.
Additional Home Sellers’ FAQs
If you didn’t find the answers you’re looking for, our local real estate agents are happy to answer any questions you may have.
