If you’re planning to sell your house this year, well, you’re in luck.
“The 2016 housing market is forecasted to be mainly a seller’s market, filled with increasing home prices, relatively low inventory, and fierce competition between buyers,” says Jonathan Smoke, chief economist for realtor.com®.
But you could still make missteps on the way to the bank. Yes, your house will likely sell, but when? Remember, time is money.
“For sellers, it’s about understanding the ins and outs of their local market so they can optimize the price of their home and close quickly,” Smoke says.
Smoke and his team analyzed market trends to distill their best advice for homeowners looking to sell in 2016. Follow these tips to get the most out of your home sale.
Price your home to the market
“What Realtors® tell me over and over again, and from the analysis that I’ve seen historically, the most important thing is getting the price right,” Smoke says.
In 2016, prices are expected to increase nationally 3% year over year. Local price changes are anticipated to be more dramatic, with markets such as Stockton, CA, and Las Vegas, NV, expected to increase by 10%. But that doesn’t mean those stats are true of your town, or your neighborhood.
“Making the error of going for a price that’s well above the market price is a recipe for being let down and potentially not selling the home at all,” he adds. A home that sits on the market eventually will turn off buyers, who will suspect that something is wrong with it.
Sellers who work with a local Realtor to optimize the price of their home based on its unique features and surrounding neighborhood are often able to receive the highest price for their market and sell more quickly.
List during peak season
Unlike buyers, who want to minimize competition, sellers benefit from demand. Prime home-buying season begins in April and reaches its peak in June, according to realtor.com analysis of home sales. Sellers who list their home during the prime spring and summer months benefit from a larger population of buyers and potential bidding wars, which often result in higher prices and faster closings.
This one seems counterintuitive, given what we’ve said about a seller’s market, but hear us out. Last year—the best for U.S. home sales in nearly a decade—37% of all sellers offered incentives to attract buyers.
“The nature of this market is that you’re going to have more first-time buyers, who are more dependent on financing,” Smoke says. Getting a loan is one thing; coming up with a chunk of cash for closing costs, on top of the down payment, is another.
“If you’re a seller and you’re able to offer some money toward closing costs, you’re actually making it easier on that buyer, and they might be more willing to give you the full asking price,” Smoke explains. You could end up with a faster sale and more profit.