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6 Spring 2024 Tips For Home Buyers And Sellers

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Updated May 6, 2024, 01:28pm EDT

The housing market is in a strange place this spring. The number of homes for sale is improving but remains historically low, and high mortgage rates have pushed many would-be buyers out of the market. Those high rates have also motivated many existing homeowners to stay put, one factor restricting the number of homes for sale. These distortions in the housing market present unique challenges and opportunities for buyers and sellers.

Pricing Is Key For Sellers

The listing price is the most important thing for a seller to get right. Homes tend to generate significantly more online attention and views the day they are first listed than when the seller later drops the price. This suggests that starting with an intentionally high price and lowering it later to drum up more interest is likely to backfire. With fewer house hunters out there, it's critical to price appropriately from the start to attract buyers. That strategy can generate multiple offers, yielding the best price.

Selling Before Buying Can Minimize Risk And Cost

Another consideration for sellers is whether to sell first or buy first. With high rates, it may make more sense to sell first, move into a short-term rental, then purchase your next home once you know exactly what you can afford based on the proceeds from your sale. This strategy bypasses a few risky situations: getting stuck paying sky-high interest on a bridge loan or making an offer on your next home before you know how much you can afford. It could also help put you in a competitive position when buying your next home because your purchase won’t be contingent on a sale.

Talk To Your Listing Agent About Fees And Services

The fees and services offered by agents are evolving. So, it’s essential to know precisely what your agent is offering and how much it will cost. Some agents will go above and beyond to sell a home and should rightfully command a higher fee, while others offer more limited services at a lower cost. Some listing agents will want to provide a substantial buyer’s agent fee, and others will recommend the seller save money by offering a lower fee. Commissions have always been negotiable. Savvy and experienced agents will know the best strategy for their local markets.

Buyers Need To Come Prepared

With a relatively low number of homes for sale, buyers must be ready to pounce when the right property hits the market. That means getting pre-approved with a lender and locking in a mortgage rate as soon as possible to guard against future rate hikes.

Consider costs that might increase, such as insurance and property taxes. Flood, storm, and wildfire insurance can add hundreds or even thousands of dollars to your monthly costs. So, be sure to factor that in as you determine your budget.

Homebuyers also need to educate themselves about how their agent will be paid. It’s no longer a given that the seller will provide a buyer’s agent fee. Buyers should talk to their agent about how to structure an offer—and the agent’s compensation—so they aren’t left scrambling for the money to pay their agent when the deal closes.

Consider Overlooked Homes

Don't overlook homes that have fallen out of escrow and are back on the market. Just because a previous buyer got cold feet doesn’t mean anything is wrong with the home. Some potential buyers will see a cancellation as a scarlet letter, which means fewer buyers to compete with on those homes.

There is also less competition for fixer-uppers from home flippers than history has shown because of high mortgage rates. With fewer flippers in the mix, you may be able to snag a property that needs some work and put your own stamp on it.

Don’t Delay

Mortgage rates are unusually high right now, and they will likely come down sooner or later. But getting the timing exactly right is tricky if not impossible. So, don’t try to time the market. Buyers who have been hoping for lower rates are regretting waiting as long as they have: “Some of my clients are so upset they haven’t bought within the last three years,” said Dallas-based Redfin Redfin agent Connie Durnal. “I ask my clients: If you don’t buy now and rates go up, will you be upset? If the answer is yes, then I get them out there now to find a house!”

Overall, the 2024 spring housing market is shaping up to be tricky to navigate. However, with proper preparation, flexibility, and realistic expectations, buyers and sellers can achieve success. The key is working closely with an experienced real estate agent who knows how to strategize in this unique environment.

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