Friends and Clients,
Even after more than a year in a frenzied market, home prices continue to soar. This is great news for those who own homes in our marketplace.
The Case-Shiller National Home Price Index measures the average home prices in major markets across the nation and they’ve tracked that home prices rose by 13.2% year over year as of March (which had the highest annual price growth rate in almost 16 years). According to the National Association of Realtors, the median sales price for existing homes increased by 19.1%.
This extreme price growth is driven by a few different factors. Record-low mortgage interest rates have made purchasing homes more affordable, even with rising home prices. Many people have taken advantage of this and are moving away from urban centers seeking homes that offer more space to accommodate working remotely and spending more time at home.
However, supply is still very limited, and inventory may continue to diminish. High prices and high demand have contributed to the shortage. April was the third month in a row of declining home sales and by the beginning of May 2021 the number of available homes for sale had shrunk by 20.5%. This has resulted in intense multiple-offer situations. Buyers are waiving inspections, appraisals, and other contingencies to draw a seller’s eye to their offers.
Homebuilders are trying their best to keep up with demand, but the new home construction industry can’t fill the gap in inventory. Increased land, labor, and material costs have made building new home more difficult and more expensive, even though demand continues to surge.
As chaotic as it sounds, this market presents a prime opportunity for homeowners to get top dollar for their property. However, just because options are slim and demand is high, that doesn’t mean a homeowner can throw their home on the market and expect to capture a maximum price. In order to calculate how much you can expect to walk away with you’ll need to assess how much it will cost to prepare your home for the market. Here is a quick breakdown of some of the costs of selling a home:
Real Estate Commissions
Sellers are responsible for paying real estate commissions, which can range from 2.5% to 3% for your own agent with a similar range for the buyers’ representative.
Preparing the Property
Although you may not need to go all out to get your home ready for the market, sprucing things up will help maximize the property’s value. You’ll want to declutter, clean, paint and stage. You’ll also want to freshen up the curb appeal. Costs will depend on what you’ll need to do. At the very least, you should make sure your landscaping is trimmed and neat. Spending as little as $300 on lawn care can yield an extra $1,200 when selling.
Repairs
Even though some buyers are waiving inspections to be more competitive, that isn’t typically recommended. Expect a home inspection and set aside 2% of your sales price to cover the costs of any necessary repairs that could come up on inspection.
Closing Costs
As a seller, you’ll be expected to pay fees at closing. These include title fees, transfer fees, escrow fees, and other miscellaneous taxes and dues. Plan to spend around 8 – 10% of your sales price on these expenses, even if it may be less than that.
The bottom line? Now is an excellent time to be a seller. The market leans heavily in your favor. With a little time, a small investment, and guidance from an experienced real estate professional, you can get the best price for your home.
If you’re curious about what you could get for your home, give us a call or text to 206-618-5123 or email penny@theoriginalpenny.com. We will help calculate your home’s value based on recent sales in Kitsap County.
Penny & Team
Serving Bainbridge Island, Poulsbo, Silverdale, Kingston, Bremerton, Port Orchard, Port Ludlow and Ocean Shores