By SAMMY DWECK
Sellers may rejoice. Although the weather is just heating up, the market’s temperature is well ahead of the curve this year. Fabulous interest rates are keeping buyers excited, and the low inventory means it is time for sellers to capitalize on demand.
Washington, D.C. real estate has outperformed the nation through the recession and recovery and continues to grow. This is certainly still a government town but the last several years have brought more in technology and the arts. Entrepreneurs and creative types are flocking to D.C.
This is a sellers’ market, and our buyer clients have been highly cognizant of this as we go into the busiest time of year in the housing market.
Sellers who take a hard line stance against losing a dime on their current homes could do better to focus on capitalizing on the exciting opportunities in this marketplace. Sellers need to understand that as mortgage rates climb back to “normal” levels, their purchasing power is eroded on their next home.
Similarly, the purchasing power of their buyers is as well — unless salaries keep pace with mortgage rates, buyers have the same monthly budget at 3.5 percent and at 7 percent, but more of those payments go to paying interest at the higher rates and less to equity. In other words, it is OK to sell your home at a price that’s close to that which you paid, even if you do not come out with every dollar you invested. That is because you have an opportunity to buy at prices similar to the ones at which you bought last time, but with a much lower rate — and move into the place you want to live in.
Furthermore, your house may be worth more than you think. The days of bidding wars and escalation clauses are back. The key to selling your home for the most it’s worth right now is the proper price and the right kind of marketing. You need to work with an agent who knows what price will inspire buyers to bite and how to make your home look its best.
As much as people like to think otherwise, buying and selling a home is emotional. Polish your home before you put it on the market. Like dating, you want to put your best foot forward. Presentation is everything. If you present well, you may achieve a competitive bidding scenario in which buyers waive certain contingencies and shorten time frames to provide you with more of a “sure thing.” You can demand better-qualified buyers if you have people falling over themselves to buy your home. Picture a dating show with many bachelorettes wooing only one bachelor, but with buyers competing on one property and trying win over a seller.
It is easy to understand why buyers get stuck on certain numbers and prices, but homeowners are usually better off than if they were renting in one of the D.C.-area’s very expensive rentals. If, after seven years of ownership, your loss is a few percent in transaction costs, but you’ve saved in not having to pay non-tax deductible rent, you’ve won this round.
It is also easy to understand why sellers get stuck on certain numbers, but value is a moment in time. We tell our clients to live where they want to live and to move when they want to move. Your primary home as not just an investment, but rather an investment in you. Smart sellers are leaving what happened in 2005 where it belongs – in 2005 – and are looking forward to the next phase of their lives in their new homes. It’s time to seize this fabulous opportunity in our sellers’ market and get moving.
Sammy Dweck of The Amber & Sammy Group with Evers & Co. Real Estate, Inc., is a licensed real estate agent specializing in townhouse, condo and co-op sales in the D.C. metro area. Reach him at Sammy@SammyDweck.com or 202-716-0400.