New Year, New House? Here’s How to Prepare for the 2018 Market
Want to buy or sell a home in 2018? Here’s what Redfin agents say you should do to get ready
Tips for Sellers
1. Declutter and Organize
“After the holidays is a great time to clear out all the things you no longer need,” says Redfin Charleston agent Tammy Trenholm. “Decide what you want to keep and then pack and store anything you don’t immediately need at your new place. Be sure to organize your closets and pantries so they are tidy. This will help showcase your storage space.”
2. Paint Inside and Out
“First impressions mean everything. Make sure interior rooms are freshly painted with a neutral color,” said Trenholm. “The exterior should be power-washed and painted if needed; often the front door can use a fresh coat of paint or stain, too.”
3. Make Updates to Increase Your Home’s Value
You should talk to your agent about small changes you can make that might have a big impact on buyers, says Redfin Washington D.C. agent Chelsea Traylor. Updates like a kitchen backsplash or new hardware throughout the house can leave a lasting impression.
“The more value a buyer sees in a property, the greater the chances that one or more buyers will make an offer at your list price, if not more,” says Traylor.
If you don’t have the time to prepare your house to sell, or if you don’t want to deal with the hassle of it, have Redfin do it for you with Redfin Concierge.
4. Talk to and Collaborate With Your Neighbors
“If you have nearby neighbors, buyers will likely be curious about how well your neighbors keep up their homes,” says Traylor. “If you share a hallway or lawn, let your neighbors know of your plans to sell and kindly ask them to tidy up. A speedy and profitable sale for you only means great things for your neighbors when they decide to sell.”
5. Figure Out the Right Time to Sell
Sellers tend to think they need to wait until spring in order to sell quickly, but in many markets that’s not the case, says Redfin Phoenix agent Raegan Kraft.
“Homes sell well year round in the Phoenix area; there are more sales in the spring and summer months. But because there are more buyers at that time, there are also more sellers and more competition,” she said. “Ultimately, sellers should sell at the time that makes the most sense for them. The beginning of 2018 is a great time to list, as buyers left over from 2017 have exhausted the limited inventory, and new buyers will begin looking as well.”
6. Price Your Home to Sell
“Look at key market indicators such as recent sales, pricing trends and inventory to guide you to the best listing price,” says Traylor. “Be cautious of overpricing and underpricing. Overpricing could scare off potential buyers who may think a seller isn’t being realistic, while underpricing means that you as a seller could leave money on the table. Redfin agents use a tech-powered comparative market analysis tool to help guide sellers to the right price. Work with your agent to develop the right pricing strategy so that your list price is either at or slightly below market value, thereby creating as much interest as possible from the buying community.”
Tips for Buyers
1. Limit Credit Card Spending and New Purchases
“Commit to refining your purchasing habits. Reducing credit card use, not opening new credit cards, and avoiding large purchases can all help improve your credit score,” says Miami Redfin agent Jessica Johnson. “Sometimes a difference of a few points can increase your purchase price approval or get you a better rate. What better time to implement new habits than a new year!”
2. Find Out How the New Tax Bill Affects You
“The 2017 tax bill that has been signed into law changes several financial considerations when buying a home, and the conforming loan limit has also been increased,” says Chicago Redfin agent Daniel Close. “There are several changes you will want to acquaint yourself with that buyers in 2017 did not have to consider.”
3. Maximize Savings
“Review your finances and set a monthly budget to start saving up for a down payment, if you haven’t already,” says Redfin San Francisco agent Miriam Westberg. “If you already have a savings account, think about other ways you can add to it. Can you cut monthly expenses somewhere else to offset more savings? Keep upcoming tax payments and/or refunds in mind too!”
4. Get Pre-approved
Many sellers won’t even entertain an offer without a pre-approval letter, says Redfin agent Danielle Parent in Cleveland. So it’s best to find a local lender who has a reputation for closing on time and get pre-approved before you submit an offer.
“The market has been so competitive that I have had sellers request a pre-approval from a local bank. In multiple offer situations, if you have a pre-approval for an FHA loan with 3.5 percent down, you should see if you can qualify for a conventional loan with 5 percent down, as this will make your offer more competitive.”
5. Set Up a Saved Search
“Once you have a general idea of your borrowing ability, jump onto Redfin.com or our app and start setting up saved searches; Redfin will send you a smartphone notification or email when a home that meets your criteria is listed,” said Redfin Seattle agent Allie Howard.
“You can set a price cap and filter by location. If you want your child to go to a specific school, you can filter by that school etc. One thing to keep in mind, however, is that in a strong seller’s market like we have in Seattle, many of the homes will end up selling above list price. So it can be a good exercise to set your search for approximately 10 percent below your price cap to allow some room to escalate up in price if a home you like ends up receiving multiple offers.”
6. Start Exploring in Person and Online
It’s good to check out different neighborhoods to get an idea of what you’re looking for, says Westberg. Then, look up the neighborhoods you like on Redfin.com and review sold homes to get a sense of sale prices in that area. Once you’re ready, you can start looking at homes.
“We saw a very busy, hot market starting in early 2017, so buyers should plan to hit the ground running,” says Close. “Do your research before February and go see some homes to get the process started. Well-prepared and experienced buyers will have the best chance at success.”
Parent says you should request a tour as soon as you see a home you like hit the market. “The Redfin team can accommodate same-day tours and if it turns out to be ‘the one’, we will be able to place a bid quickly,” she said.
7. Be Creative With Your Search
“While everyone else is looking for the three-bed, two-bath home in the ‘established’ neighborhoods, I believe you can get a better deal on homes that have room to build an extra bedroom or bathroom,” said Redfin agent Gus Sanchez in Portland. “Look for the up-and-coming neighborhoods in your area that are expected to improve and appreciate over the next few years. Renovation financing for ‘fix up’ buyers and creative financing for contingent buyers will also be key in obtaining your goals!”
8. Be Flexible With Sellers
You can make yourself more competitive by accommodating the seller’s needs, says Parent. “I will often ask the listing agent what day the seller prefers to close as this can be a consideration when looking over multiple offers. I have won offers because of my buyer’s willingness to close when the seller needs to. The more accommodating you can make your offer, the more appealing it will be to the seller.”
9. Be Patient
“Keep at it!” says Parent. “It will take time to find your perfect home but don’t get discouraged. If you lose out on a home or two, it wasn’t meant to be. In most cases, my buyers end up with a better home than the ones they lost bids on. Be patient. It will happen!”