Navigating today’s real estate market is challenging. Welcome Home received some tips from Keefe agent Kristin Stahulak, who has been a realtor for 12 years at Keefe.
WH: What are your expectations for the real estate market for the remainder of 2019?
KS: We started off a little slower than normal for the first couple months of the year, but activity has significantly increased over the last month. We are still very much in a strong sellers’ market. I think this will continue through this year and values will continue to increase. There has been such a depleted inventory of housing, the demand continues to push the pricing up. But even with a thin inventory to start the year with, since January 1st through April 15th, in Walworth county there has been a total of 420 sales, with an average sale price of 241,461. I think the sales and average price will continue to rise through the year.
What advice do you have for first time buyers who are about to enter the market?
It’s a tough market for first time buyers. In years past, buyers were able to view a home and really give it some consideration before making a decision. Now buyers need to act very quickly. They need to view the home the first day it’s listed and decide that day if it’s something they want to move forward on. It’s more important than ever to talk with a lender before viewing homes. First time buyers need to know what type of loan they are approved for, along with how high they can go in price. They should have their preapproval in hand when viewing homes so their agent can write the offer right away. If buyers like a home and need to discuss with their lender the day after viewing it, that could be the difference in missing out on a chance to bid on it. Buyers need to be preapproved and comfortable with the price point they are viewing, and ready to act quickly if they like it. It’s a lot of pressure for buyers in this market but being one step ahead can make all the difference.
We are also seeing some new documents becoming common place in the negotiating process. Multiple counter offers have buyers putting their best foot forward right away. Letters to the seller have shown to give buyers an advantage, so sellers know who is buying the home they’ve loved. And lastly, an Escalator Clause is being added to offers. An Escalator Clause will have terms that read that the buyer will pay a certain amount of money above the highest offer, up to a certain amount. This is more common in the larger markets, such as Milwaukee, but has become very common here this year. I have done an escalator clause three times already this year, and every time it was needed for the buyer to win the bid. It’s a very aggressive market and you must be ready.
What advice would you give to someone who is looking to sell their home?
If you are looking to sell your home, make sure it is ‘show ready’. In order to sell your home quickly and for top dollar, you need to do a few things to get ready. First, de-clutter! Buyers are coming in and trying to view themselves in the space, with their own belongings. When a home is full of personal items, it’s harder for them to see it as their own. Some key furniture pieces are helpful but keep it light. Less is more. Try to stage like a model home with minimal decorations and remove personal items.
Secondly, anything needing repair should be done prior to listing. If you are unsure on what needs repair, a pre-inspection is a great tool. This will give you a checklist of what needs to be fixed. When buyers view a home, you want them seeing the space and not focusing on the things they need to correct. When a home is show-ready, you’ll get your quickest and highest offers. The buyer won’t be discounting their offer to compensate for repair work. This will also help when the buyers do their own home inspection. Having repairs done ahead of time will make the entire process go as smooth as possible.
Lastly, hire a professional to list your home. It’s a common mistake to think that in a sellers’ market, it’s okay to sell for-sale-by-owner to save on fees. However, when the home is actively listed, it creates more exposure, more demand, and ultimately more money. Statistically, a home will sell for more when listed with a real estate professional and the sale increase is greater than that a typical commission. The increased exposure and competition created when buyers know everyone else is looking at the home, will drive the price up far beyond what a non-listed property will. The other advantage is the professional’s expertise guiding through the home inspection and appraisal. There can be some surprising curve-balls through the entire process, so you want someone who can guide you through the unexpected.
A professional will also make sure the listing presentation online is the best it can be. Professional photos are key. Your first showing is online. That’s what grabs the buyer’s attention and gets them to pick up the phone and schedule a showing. It’s important to know what buyers are looking for in photos and what is important to them. Photographers photos are showing the house in their best vantage point, but also showing the ‘right’ stuff. The wrong presentation can be more of a turn-off and can have a negative effect on the listing – which again is ultimately reflected in the sale price.
In summary: fix any needed repairs before listing, de-clutter, stage it for pictures and showings, and hire a professional. This will ensure you get top dollar in the shortest amount of time.
What type of homes are you seeing sell the fastest?
The home that are selling the fastest are homes that are ‘move-in ready’ and of course, priced correctly. Homes that need repair have a major hurdle that is even larger than the reflection in price. Many buyers today are getting low-down payment loans. The most common down payments I see are 5 percent, 3½ percent and even 0 percent down. When lenders are loaning very close to the full value of the home, they don’t want to see any repair work. The loan is a risk to a lender. They want to make sure that what they’re loaning on is something they can unload if they end up taking it back. They are not going to loan on a home in need of significant repairs. Since many buyers have low-down-payment loans, when a seller tries to sell a home as-is, they are eliminating a great majority of the buyers. The quickest sales are the move-in ready homes, not only because they are the most appealing, but because they are an option for all loan programs, hence all buyers.
And of course, they still need to be priced correctly. When a home is repaired, de-cluttered, staged, and marketed correctly; if the price is too high, it still won’t sell. The days of large negotiating gaps are a thing of the past. Buyers know that a seller’s price is very close to what they are willing to sell for. If the home seems too over-priced, the buyers will just move on and not try to close large gaps between what they feel it’s worth and what it’s listed at.
What is the most common mistake you are seeing from sellers and buyers?
For sellers, there are a few mistakes happening. First: not being ready to be actively listed. Selling a distressed home ‘as-is’ will take much longer to sell and will cost significantly more in sale price than the repairs would have cost.
Second: over-pricing because it’s a sellers’ market. A home still needs to be priced correctly to move quickly. The longer it stays on the market, the further you’ll get from your target price. Price correctly from day one and offers will come in at asking price or higher. Lastly, not hiring a professional. Or worse, hiring one but not taking their advice. Realtors live and breath this business and have a wealth of experience and information to share and guide with. Your net sales price will reflect that guidance and knowledge.
For buyers, the most common mistake is not being preapproved and prepared prior to make inquires on homes. If they aren’t preapproved and fully ready to make a move on a home, before scheduling showings, then they will get their hopes up and miss out on opportunities. They are at a disadvantage by not being ready and may miss out on the right home and begin to feel very frustrated. Be prepared and take the proper steps ahead of time to make the home shopping experience a good one. It’s an exciting thing to buy a home and it should be a positive experience!