How Much Do Sellers Expect Their Homes To Fetch? Hint: It’s More Than List Price

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It’s a great time to be a home seller in this white-hot housing market. Bidding wars and offers over asking are becoming the norm in many parts of the country. Move-in-ready homes can sell in hours. And buyers are so desperate to secure a property of their own that they are waiving all kinds of standard contingencies.

This means that home sellers are expecting to cash in big time. Nearly all homeowners seriously thinking about putting their properties up for sale expect to sell their homes for a profit, according to a recent realtor.com® survey. More than 650 potential home sellers participated in the survey between March 26 and April 7.

“The big takeaway is that sellers are fully aware of the competitive housing market,” says George Ratiu, realtor.com’s senior economist. “The majority of the homeowners expect to get more than they paid for their homes. And many of these sellers did not buy their homes long ago.”

In addition, almost a third of sellers, 29%, plan to list their home for more than they think it’s worth, according to the survey. More than half, 53%, expect at least to get their asking price. About a quarter, 24%, predict they’ll fetch more than the list price, while 16% are anticipating an all-out bidding war.

The severe shortage of homes for sale, coupled with record-low mortgage interest rates, which reduce monthly housing payments, have led to record home prices. The pandemic forced folks to confront any dissatisfaction they might have with their home, at a time when they were spending a record amount of time in it. This contributed to the demand for housing, which boosted prices.

Nationally, the median home list price hit a new high of $375,000 in April, according to realtor.com. That’s a 17% increase from the same month a year earlier. Homes are also selling about 41% faster than last year, lasting on the market an average of just 43 days.

With these stats, about a quarter of sellers expect to have an offer within a week of putting their home up for sale. About 16% anticipate receiving an all-cash offer.

“For buyers, prices will remain extremely high over the next few months,” says Ratiu, “although I expect the growth to slow down by August, as more sellers enter the market. A large number of sellers are expected to sell their homes this year. The increase in inventory will lead to a moderation in the price growth.”

The market is so tight that about a quarter of sellers don’t expect to be saddled with paying for repairs or improvements to their homes. Roughly 16% predict buyers will waive contingencies, such as financing, appraisals, and home inspections, to win the bidding wars.

Homeowners are putting their abodes up for sale for a variety of reasons. The top reason is that their homes no longer fit their needs. For example, a home may be too small if they’re expecting a new child, if their parents are moving in with them, or if they need additional space for a home office or other features to facilitate remote work.

Others want to score a high price while the market is still hot.

The problem is that many sellers are also buyers. Once they sell their properties, they have to compete for somewhere else to live. That’s tough in this turbo-charged market, where there isn’t even much new construction for move-up buyers.

“The main challenge many may have is finding a suitable replacement home, given the still very tight number of homes for sale,” says Ratiu.

The post How Much Do Sellers Expect Their Homes To Fetch? Hint: It’s More Than List Price appeared first on Real Estate News & Insights | realtor.com®.

source https://www.realtor.com/news/trends/how-much-do-sellers-expect-their-homes-to-fetch/