Smart Moves

Right after returning from an Independence Day vacation, the parents of two toddler boys put their petite bungalow on the market, with high hopes for a quick sale because the place is located in a coveted suburb. But despite a price cut, they’ve yet to receive a single offer.

“We thought we were selling into a red-hot market. Our boys are growing like weeds, so we really need a bigger house. But at this point, we’re disenchanted about our plans to trade up, because our place is just sitting unsold,” says the father, a college professor.

The couple don’t blame their listing agent, who has gone to great lengths to promote their sale. Rather, they blame the abrupt rise in mortgage rates, which has eroded the buying power of would-be purchasers.

“During the pandemic, every house in our neighborhood was snatched up within minutes of the first open house, if not before. But all that’s changed,” the professor says.

Joel Berner, a senior economic analyst for Realtor.com, the home listing company, says new data validate the professor’s assertions about the cooling market and buyer limits.

“Uncertainty has made its way into the minds of buyers, as 31.8% now don’t know when they want to buy,” says Berner, noting that for-sale properties are lingering unsold for five more days than at this time last year.

For the couple with the two toddler boys, living for a longer-than-expected time in a property they’re attempting to sell presents many challenges. But real estate specialists say it’s essential that owners keep their domain show-worthy until it’s ultimately sold.

“Unfortunately, you can’t relax your standards for cleanliness and order until you’re sure you have a solid transaction,” says Eric Tyson, a personal finance expert and co-author of “House Selling for Dummies.”

Here are a few pointers for sellers:

-- Try to prepack to the extent possible.

Vicki Norris, a professional organizer and former real estate agent, knows how hard it can be to keep a house in prime showing shape. It’s especially difficult for people who are working from home or selling involuntarily.

“Sometimes life takes people off track, and they get unusually disorganized. Then it’s twice as hard to keep their home in good condition for a sale,” says Norris, who runs her own consulting firm, Restoring Order (restoringorder.com).

To limit upkeep demands during the showing period, Norris recommends that sellers clear through their clutter in advance of putting their place on the market. Throw away or donate any items you don’t intend to keep and place the remainder in neatly stacked boxes in your garage or other storage area.

-- Consider hiring a cleaning service.

Are you sloppier than the average homeowner? If so, it might be wise to pay for what real estate agents call a “super-duper cleaning.”

“If you start with a professional cleaning at the beginning, you’ll have an easier time keeping your house tidy all the way through to your sale,” says Sid Davis, a real estate broker and author of “A Survival Guide to Selling a Home.”

Though it’s likely to cost over $100, he says a single in-depth cleaning could hold you for more than a month before another in-depth cleaning job would be necessary.

“Sorry to say that hiring a cleaning crew won’t spare you the need for routine upkeep. This will be no substitute for keeping your dishes washed and your bathroom toiletries put away. But it’s still a big step,” Davis says.

-- Seek to get everyone in your household to cooperate.

After a home has sat unsold for more than a month, those who live there can easily lose focus and slip back into their bad habits.

"The problem is that keeping your house in show condition is not a relaxed way of living, so people get tired of it,” Davis says.

According to Ashley Richardson, an agent affiliated with the Long & Foster realty firm, it can be especially tough to ensure that children’s rooms are kept orderly and that their toys are put away.

“The parents may need to clean their rooms for them. Alternatively, to get the kids to do it themselves, you might need to bribe them with pizza or a dinner out,” she says.

-- Accept the reality that selling is stressful.

Donna Goings, a realty company broker-owner, says homeowners who earnestly want to sell should “keep their houses looking good enough to appear in a magazine.” But she cautions that even picture-perfect properties that are fairly priced can languish unsold for a lengthy period through no fault of their owners.

“Sometimes, there’s no rhyme or reason why a particular house won’t sell for a long time. Even if you make the house beautiful and set the price right, it could stay on the market for months,” Goings says.

Richardson advises her clients to avoid dwelling on critiques of their property.

“Buyers are more candid than they were in the past, and sometimes can be quite blunt in their feedback after a showing,” Richardson says.

To limit your exposure to unfiltered and discouraging negativity about your home, she suggests you tell your listing agent to filter out all pointlessly critical comments about your place.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

As the real estate market hurtles toward a new normal, there are major differences in outlook between buyers and sellers that are slowing the pace of transactions.

“Whenever the market changes, it’s really hard to put deals together,” says Glenn Kelman, the CEO of Redfin, the national realty firm.

Some sellers watching macroeconomic reports are focused on next year, when they anticipate that high property prices might slip. In contrast, sellers are focused on last year’s sales.

“Sellers remember that house down the street that sold for a song just four to eight months ago,” Kelman says.

While purchasers aren’t enjoying a bona fide buyer’s market, the situation is definitely becoming more buyer friendly in some ways. One positive is that since the worst of the pandemic, the number of available properties has greatly increased.

“Today’s shoppers can celebrate the fact that they have many more homes to consider than last year’s shoppers did,” says George Ratiu, economic research manager at Realtor.com, the home listing company.

Still, one of the negatives facing buyers these days is the increasing cost of home finance.

“Higher mortgage rates continue to take a toll on buyer purchasing power, despite all-time highs in rent prices, which continue to motivate some shoppers,” Ratiu says.

Sellers who lack awareness of the pressures affecting buyers can hurt themselves if they overprice a property for current market realities, says Mary Bazargan, a listing agent based in Washington, D.C.

“When we price a new listing conservatively, we’re getting multiple offers, and these homes are often selling above list price. But if we push the price aggressively high, the home tends to sit on the market for a while,” Bazargan says.

Eric Tyson, a personal finance expert, agrees that those who attempt to test the market with too high a price typically attract fewer prospects.

“Buyers who shop with an agent usually shop with a top pricing point in mind. They won’t see properties above that pricing ceiling. So, overpriced houses aren’t always on their radar,” says Tyson, the co-author of “House Selling for Dummies.”

Moreover, due to internet sleuthing, buyers are increasingly savvy about property valuations. Many are annoyed by the appearance of greed on the part of sellers and refuse to negotiate with those who ask too much.

“Remember that Americans don’t like to haggle. So don’t count on buyers engaging with you in multiple rounds of negotiation,” Tyson says.

Here are a few other pointers for sellers:

-- Look into local valuations before engaging a listing agent.

Sid Davis, a Utah-based real estate broker, notes there are now numerous websites that offer free and instantaneous assessments of home values. One of the best known is zillow.com.

It’s unrealistic to look to such “fast-pricing” sites for a definitive answer on the current worth of your place. After all, they typically rely heavily on publicly available data on recent home transactions. And some jurisdictions restrict or delay the release of such statistics. Still, such sites can sometimes give you a fair estimate.

“At least they’ll help you get into the right ballpark on the current value of your house. This gives you a starting point for a pricing discussion with the agents you interview,” says Davis, the author of “A Survival Guide to Selling a Home.”

Another way to gain a feel for prevailing prices before you hire an agent is to attend open houses.

Besides a sense of pricing realities in your neighborhood," you can also get a preliminary comparison on the condition of your home versus rival properties,” Davis says.

-- Consider multiple agents before picking one.

Interview at least three agents working in your area and don’t pick one who relies on hunches.

“Ask each agent for an honest evaluation of both the condition of your place and its present value. Make sure each agent shows you the comparable sales they used to make their price recommendation,” Tyson says.

To determine if an agent is truly active in your neighborhood, he suggests you ask for an “activity list” of all the properties the person has listed there during the prior six to 12 months.

-- Research each candidate’s track record on pricing.

These days, many sellers don’t receive their full asking price at the closing table. But if their property was marked accurately from the outset, they should come fairly close.

To assess an agent’s pricing recommendations, look at a few key numbers that reflect their track record. If the agent is routinely making accurate price recommendations, there should be relatively little disparity between the original list price and the final closing price.

“Sellers shouldn’t have to knock down their price just to get their property sold. In most cases, their home should sell for no less than 5% under the asking price,” Davis says.

He suggests you ask prospective listing agents to show you list-to-sale numbers for all the homes they’ve sold during the last 90 days.

-- Don’t let your ego affect your pricing.

Some people assume listing agents are motivated to price low with an eye to quick sales. But Davis says the greater risk is that occasional agents will recommend too high a price in hopes of flattering you into working with them.

Overpricing can even hurt owners in an area with few homes on the market.

“It doesn’t matter if you’re selling in a neighborhood that’s hot, cold or lukewarm. Asking way too much can easily kill your chances for a fast and successful sale,” Davis says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

The pandemic had just reached the U.S. in 2020 when a couple in their mid-30s -- with dreams of raising a family --decided it was time to scout out a family-friendly neighborhood. They found a choice area but got caught up in a bidding war to buy a small gray bungalow with tiny bedrooms and bathrooms.

Two years and two babies later, the couple -- an RN and an IT manager -- already feel squeezed in the 1,900-square-foot house. So early this summer, they put the bungalow up for sale. Now they aspire to trade up to a bigger house in the same area.

“We still love the neighborhood, but we’re extremely disappointed in the response to our listing. The bidding wars that came with the pandemic are gone. Demand has plummeted. Sad to say, we haven’t received a single offer,” the RN laments.

The couple who bought the gray bungalow is not alone in experiencing second thoughts about their pandemic-era purchase. According to an extensive survey of buyers done for Clever Real Estate, a nationwide brokerage, 72% of pandemic-period purchasers have regrets. Fully 30% believe they paid too much, including many who bid over the asking price.

Stacy Berman, a veteran real estate agent, doesn’t know the couple who bought the gray bungalow, but she has a few words of advice for those who resisted buying during COVID and still wish to become homeowners.

“With the market more balanced between buyers and sellers, it’s actually a great time to buy. The frenzy is behind us, and there are more properties sitting unsold in an increasing number of neighborhoods. This makes it an excellent time to negotiate with sellers who are impatient to move,” says Berman, who’s sold homes since 2003.

Still, she cautions against the assumption that real estate values will fall steeply in the near future, given that many young adults are still in the household formation stage and wish to leave their rental apartments. Certainly, property prices are rising more slowly than in the recent past. But they’re still 18% higher than during the same period last year, according to the CoreLogic Case-Shiller Index.

“Some owners are cutting their list prices. But they have no intention of giving their houses away. So forget bottom shopping,” says Berman, who encourages buyers to move forward cautiously.

Here are a few pointers for buyers determined to avoid regrets:

-- Develop a “mission statement” for your ideal lifestyle.

Doro Kiley, a certified life coach, recommends that couples planning a home purchase write down their respective visions of a dream house -- including both location and home features. They should then share their visions, combining the key elements of both into a single statement.

“In my work I come across it all the time: Husbands and wives who start with different visions. Maybe she’s focused on a traditional colonial with a picket fence and lots of bedrooms for the grandchildren. But he wants a more contemporary house, like a mid-century-modern place with a big garage,” Kiley says.

Merrill Ottwein, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org), suggests that homebuying couples try to resolve their differences by distinguishing between “wants” and “needs.”

-- Ponder the implications of a lengthy commute.

During the pandemic, when remote work was still an option for many professional workers, more buyers opted to live far from their workplaces. But now that more employees are being called back to the office, the trade-offs of a long commute are more wrenching.

As Ottwein says, one of the most difficult trade-offs many families face is between a larger, newer house with a longer commute and a smaller, older place that’s closer to a city center and the workplace of the primary wage earner.

Buyers who consider an outer-tier suburb are often driven by the desire for a larger property or what they perceive to be better schools.

“Unfortunately, good schools often correlate with newer suburbs rather than older areas that are close in,” Ottwein says.

But before you opt for a distant suburb, he strongly recommends you do morning and afternoon rush-hour test drives. This way, you’ll know more precisely what sort of traffic to expect if you buy there.

-- Factor in the demands of a large yard.

Many people with young children hang on tightly to the hope that their kids will have a large backyard where they can play. This aspiration can influence them to pick an outlying suburb at the expense of their convenience and commuting time.

But are the trade-offs necessary to acquire a large piece of land always worth it? Not necessarily, says Ottwein, noting that these days children often spend much more time in organized athletic and recreational activities than did their parents.

“With the pandemic largely over, many kids are again programmed to the hilt with sports, music lessons and school events. They have little time for the sort of free backyard play their folks remember so nostalgically from childhood,” he says.

There are only a few buyers whom Ottwein believes make as much use of their large lots as they expect when they first buy the place.

“Mostly it’s just those few people who want horses -- or are true isolationists -- who make enough use of a large piece of land to justify all the sacrifices of living far from their jobs,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)