You likely already know this, but we’ll tell you again: Things are expensive right now. Inflation affects everything from gas prices to airfare to the bill at a restaurant. It also affects mortgage rates: The average rate for a 30-year fixed mortgage recently rose to over 7 percent for the first time in 20 years.
That’s a sharp contrast to where we were in the height of the Covid-era market, when rates dropped as low as below 3 percent. That led to a crazy competitive housing market that left sellers in an enviable position—you’ve likely heard the stories about lines around the block at open houses, buyers waving all contingencies, and homes selling for way above listing prices.
So—with rates spiking, are DC-area agents seeing a flip to a buyer’s market?
Not exactly. If anything, it’s moved from a seller’s market to a more balanced one, says Compass real estate agent Kate Bohlender. ”One of the most important things for buyers and sellers to realize right now is that we’re not in a down market; we’re almost in a normal market,” she says. “We’ve gotten so used to the craziness of the past two years.”
Robert Hryniewicki of HRL Partners at Washington Fine Properties agrees: “We’re going from a marketplace that was hyper-charged, where you would put a listing for sale on a Thursday, and by Tuesday, you’d have 12 offers,” he says. “Now if you’ve come for sale, it might take two weeks or four weeks, even, for a contract to materialize. That is normal.”
This means it’s no longer the norm for sellers to throw their houses on the market as-is and sell them in a few days. The same goes for buyers having to waive all contingencies and go in with aggressive offers.
With the return to a more normal market, what should sellers do when listing their homes today? Nothing crazy, say agents, but it is a departure from the past few years: They actually have to make an effort—you know, like they used to before Covid.
You’re forgiven if you’ve forgotten what it looks like to list a home in a more typical market. Here are real estate agents’ tips for today’s sellers:
Come in with reasonable expectations
Gone are the days of buyers going way over asking prices, says Coldwell Banker agent Ericka S. Black. When pricing your home, it’s important to adjust your expectations to today’s market. Look at what comparable houses near you have sold for in the last two months, says Black, not eight months ago. And when setting a price, you also need to factor in that mortgage rates are nearly double what they were—someone who can afford a $700,000 house at a 3 percent rate might not be able to afford it at a 7 percent rate.
“There just has to be some give-and-take,” she says. “It’s not that the sellers will not make money. They’re just not going to make the exorbitant amount that they were thinking. They’re going to get a more realistic number based on market conditions.”
Position your home in its best light
This might seem like a given, but it wasn’t necessary over the last few years. “Six to eight months ago, it really didn’t matter what your house looked like; you still had all that demand,” says Hryniewicki. “So reverting back to normalized market conditions is very important.”
The most crucial part? The exterior, says Bohlender. It’s the first photo you’ll show on your listing, so make sure it has curb appeal and spring for some landscaping or paint if necessary. “That is worth the money.”
And before showings, take care of the obvious—making sure your home is clean and smells good. Don’t forget about little things like washing your windows and making sure all your lightbulbs are the same warmth, says Hryniewicki—that makes a difference.
Bohlender recommends asking your agent if they’ll cover staging costs, if necessary. And while it’s not crucial you spring for a pre-listing kitchen or bathroom renovation, she suggests finishing the floors or painting the walls if they look worn.
Pick your agent thoughtfully
“Select the company that’s offering the most to get it sold,” says Black. Take into account how an agent is going to market a property—do they have a strategy for the pictures and the virtual tour? Are they well connected with an expansive network? Do they offer things like staging? These things matter more now in today’s market.
Be ready for some negotiating
”It’s a more level playing field,” says Bohlender. “Buyers are asking more of the sellers than they have in the last couple of years, so you should be prepared for anything.” That means full home inspections are a thing again, and sellers should be prepared for buyers to ask them to make repairs or help with closing costs.
Negotiating might come into play, too, says Hryniewicki. Sellers, expect that buyers might accept to take your home as-is, but could ask for a lower price; alternatively, they could offer to pay full price, but ask that the seller fix everything that comes up during the inspection.