How to Prepare for a Quick Home Sale as Mortgage Rates Rise
We asked Craig McCullough, Catalyst Group Director at Compass Real Estate in DC, and Lindsay Reishman, founding partner of Reishman and Pareto Group in DC, for advice for sellers in a hurry. The following has been edited for length and clarity.
Q: Some buyers may be in a rush to buy now before rates rise. So what can sellers do to speed up their pre-sale preparation?
McCullough: First, make a plan with the team. Many sellers rush to do what they think is best, then they call their agent. This is the wrong order. Call your agent first. Together, you can prioritize things to do and save yourself unnecessary projects that won’t improve value.
Next, focus on high yielding items first. Kitchen or bathroom updates are best. Since time is of the essence here, focus on the quick stuff, like replacing outdated cabinet hardware, sink faucets, pendant lights, etc.
Once those things are sorted, focus on the things that won’t increase the value, but will market the home better. A neutral paint color probably won’t increase the value of a home, but it will certainly get buyers interested much faster if they don’t have to dread painting the house.
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Finally, make sure the space is neat, clean, and free of excess. You might be ok with a coffee maker, soda squirt, tea kettle, knife block, canisters, etc. on your kitchen counters. I promise you buyers are not. They respond best to a light, open space. Apply the same logic to living spaces. The tchotchkes in your home may be neutral and you may not notice them because you see them daily, but buyers will feel cramped and overwhelmed. You may need to pack them to move, do it early.
Also, a tip: Call your agent as soon as possible and use their network. I was able to get my contractors in and out for a complete kitchen and bathroom remodel in two weeks. Why? Because your agent has a connection to these contractors from all the referrals they send. Just ask for help.
Reishman: Good presentation and reasonable prices are the keys to selling quickly. Two things you can do to speed up the process are 1. Put your listing in MLS with a “coming soon” status while you do the work. We are not allowed to show the property when the status is ‘coming soon’, but this helps agents get your listing on their buyers’ radar, so they are prepared and ready to go once you have posted the ad. 2. Hire help. Some companies specialize in managing the process, so when we have little time and our clients have a lot to coordinate, we will pay for an outside company to come and oversee the process (Wayforth.com is an example of a company like this one). They will coordinate with painters and movers, get quotes, help pack, etc.
Q: How are sellers adapting to rising rates?
McCullough: Most sellers are still holding their own on prices, despite rising rates. The duration and number of bidders have changed. Homes take longer to sell, and you usually see strong supply, not the bidding wars we’ve seen before. A property that is priced correctly will get its list price, as long as the seller is patient.
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Reishman: There is still very little supply and quality homes are in high demand, so no incentive is needed. The biggest difference I see is that sellers initiate the selling process earlier to allow buyers to qualify for lower rates. For example, I have clients who are buying a house under construction in Northwest DC and will be delivering in October. Instead of waiting to sell their home in the fall, we’re now posting it privately, so buyers can set a rate and close it, then rent it out to sellers as needed.
Q: Do sellers always receive multiple offers? Is there a strategy they use to encourage this?
McCullough: Sellers should no longer expect multiple offers. It still happens, but with much less frequency. The only way to encourage this is to offer low prices, but you also risk having only one low price offer. Right now, patience and realistic expectations are key.
Sellers should arrange for their agent to partner with a local lender to arrange special financing. Many lenders will offer incentives to be advertised with the listing. It’s a win for the buyer and a win for the seller. All it takes is a phone call.
With ever-changing rates, many buyers bought at the top of the approved price range. A good listing agent should carefully review the lender’s guidelines and the buyer’s pre-approval. If a seller accepts an offer and the slight rate change makes the house more affordable, the buyer walks out and the seller now has a blemished property. Check the buying power of the buyer before accepting an offer.
Reishman: Yes, we always see several offers. Our strategy continues to ensure the property presents well and to price it fairly – don’t be too greedy with the list price, but let the market dictate the value.