If Your House Hasn’t Sold Yet, It May Be Overpriced

Has your house been sitting on the market a while without selling? If so, you should know that’s pretty unusual, especially right now. That’s because the supply of homes available for sale is still far lower than what we’d see in a normal year. That means buyers have fewer options than they usually would, so your house should be an oasis in an inventory desert.

So, if homebuyers have limited choices and your house still hasn’t sold, there’s a reason why. Let’s break one potential sticking point that may be turning buyers away: your asking price.

Especially with today’s higher mortgage rates already putting a stretch on their budget, buyers are being a bit more sensitive about price. As a recent article from the Wall Street Journal (WSJ) says:

“If you are serious about selling your home now, don’t get greedy with the asking price. This is still a seller’s home market as there simply aren’t enough affordable homes for sale in many parts of the country. But with average 30-year mortgage rates above 6%, buyers are much more price-sensitive than they were a year ago.”

Why Setting the Right Price Matters

While you want to maximize the return on your investment when you sell your house, you also need to be realistic based on current market conditions. The simple truth is your house is only going to sell for what people are willing to pay right now.

This can be a hard thing to accept. Especially since emotions can run high during the selling process, which only complicates matters more. After all, you may have lived in this house for years, so it’s only natural you’re emotionally tied to it – and those heartstrings can make it harder to be objective.

But it’s important to acknowledge that a bigger-than-expected price tag deters buyers and may make them dismiss your house as a possibility before even seeing it. And if no one’s looking at it, how will it sell?

If you want to get your house sold, you’ll need to do something to spark interest in your home again. That’s where a local real estate agent comes in. They’ll help use data to find out if it’s priced too high for your local market. They balance the value of homes in your neighborhood, current market trends and buyer demand, the condition of your house, and more to find the right price for your house, so you can close this chapter and start your next one.

Bottom Line

While it’s true there aren’t that many homes available for sale right now, your home’s asking price still matters. And, if it’s not selling, it may be priced too high.

Experts Project Home Prices Will Rise over the Next 5 Years

Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):

And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in our local area, let’s connect.

Marty Gale

Buy or Sell with Marty Gale

"Its The Experience"

Principal Broker and Owner of Utah Realty™

Licensed Since 1986

CERTIFIED LUXURY HOME MARKETING SPECIALIST (CLHM)

PSA (Pricing Strategy Advisor)

General Contractor 2000 (in-active)

e-pro (advanced digital marketing) 2001

Certified Residential Specialist 2009

Certified Negotiation Expert 2014

Master Certified Negotiation Expert 2014

Certified Probate Specialist Since 2018

Senior Real Estate Specialist

Certified Divorce Specialist CDS

Contact me!

Wednesday Word | After-Repair Value

“Wednesday Word” After-Repair Value or ARV

What Is After-Repair Value (ARV) In Real Estate? ARV is the estimated value of a property after completed renovations, not in its current condition. House flippers commonly use ARV as a way to gauge the worth of a fixer-upper property, including how much it can be bought, and then resold for after repairs.

House flippers commonly use ARV as a way to gauge the worth of a fixer-upper property, including how much it can be bought, and then resold for after repairs.

The world of House Flipping! Let’s delve into the world of real estate and uncover the ins and outs of ARV, or After Repaired Value. In today’s discussion, we will specifically focus on the challenges faced by homeowners when dealing with house flippers. With the rising popularity of flipping properties for profit, it’s essential to understand the concept of ARV and the potential pitfalls that can arise during these transactions. Whether you’re a homeowner looking to sell or a curious enthusiast of real estate, this article aims to provide you with valuable insights into the world of house flipping and the problems that can arise when dealing with one.

Understanding ARV: The Key Metric For House Flippers

When it comes to the world of house flipping, one of the most crucial metrics to understand is the After Repaired Value (ARV). ARV represents the estimated value of a property after it has been repaired and renovated, making it a vital tool for both experienced and novice house flippers. This metric not only helps flippers determine potential profit margins but also assists in assessing risks and making smart investment decisions.

House flippers are individuals or companies who purchase distressed properties, renovate them, and sell them for a profit. The success of their endeavors largely depends on accurately estimating the ARV of the property they plan to flip. However, determining the ARV is not as simple as it may seem. It requires a thorough analysis of various factors, including market trends, property condition, location, and the costs associated with repairs and renovations.

One common problem that house flippers encounter is underestimating the ARV. When flippers fail to accurately assess the potential value of a property after it has been repaired, it can lead to significant financial losses. Overlooking important details or relying on outdated information can result in unrealistic expectations and an inability to sell the property at the desired price.

To avoid this problem, flippers should conduct comprehensive market research and utilize the expertise of real estate professionals. This may involve studying comparable properties in the area that have recently sold, analyzing market trends, and consulting with realtors or appraisers who have a deep understanding of the local market. By incorporating these analyses into their calculations, flippers can make more informed decisions and mitigate potential risks.

Another challenge that flippers often face is accurately estimating the cost of repairs and renovations. Renovating a property can be a complex process, and unforeseen expenses are not uncommon. Flippers must consider the cost of materials, labor, permits, and potential delays when determining the budget for renovations. Any miscalculations in this area can significantly impact their profit margins.

To overcome this challenge, it is crucial for flippers to work closely with contractors and other professionals in the construction industry. Having reliable and trustworthy experts who can accurately assess the scope of work and provide accurate cost estimates is essential. By involving professionals from the beginning, flippers can avoid unexpected surprises and ensure that their budget aligns with the desired outcome.

Additionally, flippers must also take into account the time it takes to renovate and sell the property. Holding costs, such as loan payments, property taxes, and utilities, can quickly eat into profits if the property remains on the market for an extended period. Therefore, accurately estimating the time required for renovations and factoring it into financial planning is essential for successful house flipping.

In conclusion, ARV is a key metric for house flippers, allowing them to determine potential profit margins, assess risks, and make informed investment decisions. Understanding ARV requires a comprehensive analysis of various factors and market trends, as well as accurate calculations of repair and renovation costs. By avoiding common pitfalls such as underestimating the ARV or miscalculating renovation expenses, flippers can increase their chances of success in the highly competitive world of house flipping.

The Appeal And Pitfalls Of House Flipping

House flipping has gained significant popularity over the years, attracting both seasoned investors and budding entrepreneurs looking to make a quick profit in the real estate market. With the promise of substantial returns, the appeal of house flipping is undeniable. However, behind the allure lies a host of potential pitfalls and challenges that house flippers must navigate.

At the heart of successful house flipping lies a key concept known as the After Repaired Value (ARV). ARV refers to the estimated value of a property after it has undergone necessary repairs and renovations. This value is crucial for house flippers as it determines the potential profit or loss they will incur on their investment.

The ARV is calculated by considering several factors, including the current market conditions, the property’s location, its size and layout, as well as the quality of the repairs and upgrades to be made. For house flippers, accurately estimating the ARV is essential in determining the purchase price they are willing to pay for a distressed property.

The appeal of house flipping lies in the potential for substantial profits. Successful house flippers can often turn a neglected, run-down property into a desirable living space, commanding a higher price in the market. This ability to transform a property and contribute to the revitalization of neighborhoods can be incredibly fulfilling for investors.

Moreover, house flipping allows individuals to capitalize on their creativity and vision. Through strategic renovations and upgrades, house flippers can add value to the property and attract potential buyers or tenants. This aspect of house flipping appeals to those with a keen eye for design and a passion for transforming spaces.

Despite its appeal, house flipping is not without its challenges. One of the most significant pitfalls of house flipping revolves around the unpredictability of renovation costs. In many cases, unforeseen problems such as structural issues, plumbing or electrical problems, or even permit delays can lead to significant cost overruns. These unexpected expenses can eat into the potential profit margins and turn a lucrative venture into a financial burden for house flippers.

Another challenge that house flippers often face is the competitive nature of the real estate market. As more individuals venture into house flipping, the demand for distressed properties increases, making it harder to find lucrative investment opportunities. The increased competition can lead to inflated purchase prices and, consequently, decreased profit margins for house flippers.

Furthermore, dealing with contractors and subcontractors can also pose challenges for house flippers. Coordinating schedules, ensuring quality workmanship, and managing the overall renovation process can be time-consuming and stressful. Delays in completing renovations can negatively impact the potential profit of the project and stretch the timeline for completion.

Lastly, house flippers must also consider the market conditions and trends when determining the ARV. A sudden market downturn or changes in buyer preferences can significantly impact the property’s value, potentially leading to a loss instead of a profit. Staying informed about the local real estate market and accurately forecasting future trends is essential for success in the house flipping business.

In conclusion, house flipping offers a tempting proposition for investors seeking to enter the world of real estate. The potential for substantial profits and the ability to transform neglected properties into desirable living spaces are alluring aspects of this venture. However, the path to success in house flipping is fraught with challenges. Accurately estimating the After Repaired Value, managing renovation costs, dealing with market competition, and navigating the complicated renovation process are just a few of the hurdles that house flippers must overcome. Despite the pitfalls, those who approach house flipping with thorough research, careful planning, and a realistic understanding of the risks can find success in this exciting and potentially profitable endeavor.

Challenges In Dealing With House Flippers: A Deep Dive

House flipping has become a popular practice in the real estate industry. House flippers, also known as real estate investors, purchase distressed or undervalued properties, make renovations and repairs, and then sell them for a profit. This practice has gained significant attention due to the potential returns it offers, attracting both experienced professionals and novice investors. However, while house flipping can be a lucrative business, there are several challenges associated with dealing with house flippers that prospective sellers should be aware of.

One of the major challenges in dealing with house flippers is accurately determining the After Repaired Value (ARV) of the property. The ARV is the estimated value of a property after it has undergone the necessary repairs and renovations. House flippers rely heavily on this value to determine the budget and potential profit of a house flip. However, estimating the ARV accurately can be a complex task as it involves considering numerous factors such as the property’s location, market conditions, and comparable sales in the area. Sellers who are not familiar with these considerations may find it difficult to negotiate a fair price with house flippers.

Another challenge in dealing with house flippers is ensuring that the repairs and renovations they undertake are of high-quality. House flippers often have tight budgets and strict timelines, which can sometimes result in them cutting corners or using subpar materials. This can lead to issues down the line, leaving the seller responsible for any problems that arise after the sale. It is crucial for sellers to thoroughly vet house flippers, check their previous projects, and ensure that proper contracts are in place to protect their interests.

Transparency is yet another challenge often faced when dealing with house flippers. Some investors may hide certain information about the property or its history to maximize their profit margins. It is important for sellers to be aware of any potential liens, legal issues, or structural problems associated with the house. Conducting a thorough inspection and working with reputable professionals such as real estate agents or property inspectors can help sellers uncover any hidden issues and make informed decisions.

One of the most significant concerns when dealing with house flippers lies in the communication process. Many investors work on multiple projects simultaneously, and it can be challenging to maintain consistent and open communication throughout the entire process. Sellers may find it frustrating to get updates on the progress of the renovations, negotiate changes or additional repairs, or even finalize the sale. Establishing clear lines of communication and ensuring regular updates can mitigate these challenges and maintain a positive working relationship with house flippers.

Moreover, the fast-paced nature of house flipping can sometimes create pressure on the seller to make quick decisions without fully considering all available options. House flippers often present attractive cash offers, positioning themselves as a hassle-free alternative to the traditional selling process. However, it is essential for sellers to carefully evaluate these offers against other options, such as working with real estate agents or exploring the market to potentially fetch a higher sale price.

Overall, while house flipping can offer beneficial opportunities for both buyers and sellers, dealing with house flippers can present a unique set of challenges. Accurately determining the ARV, ensuring quality repairs, promoting transparency, maintaining effective communication, and carefully evaluating offers are crucial steps for sellers to navigate the intricacies of working with house flippers. By taking these challenges into account, sellers can minimize risks and maximize the potential rewards associated with selling properties to house flippers.

Strategies For Overcoming Problems With House Flippers

When it comes to dealing with house flippers, there can be a variety of challenges that arise. These challenges can stem from differing priorities, misunderstandings, or even unethical practices. While it is true that not all house flippers are problematic, it’s important to be aware of the potential issues that may arise when working with them. In this section, we will discuss strategies for overcoming problems with house flippers and ensuring a smooth transaction.

1. Research the Flipper: Before entering into any agreement with a house flipper, it is crucial to conduct thorough research on their background, track record, and reputation. Look for reviews, testimonials, or case studies to gauge their credibility and reliability. This step can save you from potential headaches down the line. It’s also a good idea to ask for references and reach out to past clients to cross-verify their experiences.

2. Set Clear Expectations: When working with house flippers, it is essential to have open and honest communication from the beginning. Clearly define your goals, timelines, and expectations regarding the project. Discuss the scope of work, budget, and any specific requirements you may have. This will help set realistic expectations and minimize misunderstandings during the process.

3. Get Everything in Writing: It’s crucial to document all agreements, contracts, and discussions in writing. Having a written agreement ensures that both parties are on the same page and helps protect your interests. Include details such as the schedule of work, payment terms, responsibilities of each party, and remedies for breach of contract. This will provide a reference point in case any disagreements or disputes arise.

4. Regular Communication and Inspections: To avoid surprises and maintain transparency, it is important to establish a regular communication schedule with the house flipper. Stay involved in the process by visiting the property regularly to monitor progress and address any concerns promptly. Regular inspections can help identify potential issues and allow you to address them before they become more significant problems.

5. Secure Financing and Independent Appraisal: Before beginning any transactions with house flippers, it is crucial to have your financing in order. Obtain pre-approval from your lender to ensure you have the funds necessary to complete the project. Additionally, consider getting an independent appraisal of the property to determine its accurate After Repaired Value (ARV). This will help you gauge the profitability of the project and avoid overpaying for the property.

6. Work with Professionals: Considering the complexity of real estate transactions, it is advisable to seek professional help when dealing with house flippers. Hire a real estate attorney who specializes in property transactions to review contracts and safeguard your interests. Additionally, consider collaborating with real estate agents, inspectors, and contractors who have experience dealing with house flippers. These professionals can offer guidance, insights, and additional layers of protection throughout the process.

7. Trust Your Instincts and Walk Away if Necessary: If you have reservations or concerns about a house flipper or their practices, trust your instincts. If something doesn’t feel right or you suspect unethical behavior, it may be best to walk away from the transaction. Avoid getting caught up in potential scams or compromising situations that could lead to financial or legal troubles. Remember, it’s better to lose out on a potential deal than to enter into a harmful agreement.

By implementing these strategies, you can minimize the risks and problems associated with dealing with house flippers. While not all flippers are problematic, it is crucial to conduct due diligence and take necessary precautions before engaging in any real estate transactions. Stay informed, communicate effectively, and prioritize your best interests to ensure a smooth and successful experience.

Marty Gale

Buy or Sell with Marty Gale

"Its The Experience"

Principal Broker and Owner of Utah Realty™

Licensed Since 1986

CERTIFIED LUXURY HOME MARKETING SPECIALIST (CLHM)

PSA (Pricing Strategy Advisor)

General Contractor 2000 (in-active)

e-pro (advanced digital marketing) 2001

Certified Residential Specialist 2009

Certified Negotiation Expert 2014

Master Certified Negotiation Expert 2014

Certified Probate Specialist Since 2018

Senior Real Estate Specialist

Certified Divorce Specialist CDS

Contact me!

Is Your House the Top Thing on a Buyer’s Wish List this Holiday Season?

This time every year, homeowners who are planning to move have a decision to make: sell now or wait until after the holidays? Some sellers with homes already on the market may even remove their listing until the new year.

But the truth is, many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. As an article from Fortune Builders explains:

“ . . . while a majority of people take a step back from the real estate market during the holiday months, you may find when the temperature drops, your potential for a great real estate deal starts to rise.”

To help prove that point, here are four reasons you shouldn’t wait to sell your house.

1. The desire to own a home doesn’t stop during the holidays. While a few buyers might opt to delay their moving plans until January, others may need to move now because something in their life has changed. The buyers who look for homes at this time of year are usually motivated to make their move happen and are eager to buy. A recent article from Investopedia says:

“Anyone shopping for a new home between Thanksgiving and New Year’s is likely going to be a serious buyer. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sale.”

2. While the supply of homes for sale has increased a little bit lately, overall inventory is still lower than it was before the pandemic. What does that mean for you? If you work with an agent to price your house at market value, it could still sell quickly because today’s buyers are craving more options – and your home may be exactly what they’re searching for.

3. You can determine the days and times that are most convenient for you for home showings. That can help you minimize disruptions to your own schedule, which can be especially important during this busy time of year. Plus, you may find buyers are more flexible on when they’ll tour a house this time of year because they have more time off from work around the holidays.

4. And finally, homes decorated for the holidays appeal to many buyers. For those buyers, it’s easy to picture gathering with their loved ones in the home and making memories of their own. An article on selling at this time of year offers this advice:

“If you’re selling around a holiday and have decorations up, make sure they accent—not overpower—a room. Less is more.”

Bottom Line

There are plenty of good reasons to put your house on the market during the holiday season. Let’s chat and see if it’s the right time for you to sell.

Marty Gale

Buy or Sell with Marty Gale

"Its The Experience"

Principal Broker and Owner of Utah Realty™

Licensed Since 1986

CERTIFIED LUXURY HOME MARKETING SPECIALIST (CLHM)

PSA (Pricing Strategy Advisor)

General Contractor 2000 (in-active)

e-pro (advanced digital marketing) 2001

Certified Residential Specialist 2009

Certified Negotiation Expert 2014

Master Certified Negotiation Expert 2014

Certified Probate Specialist Since 2018

Senior Real Estate Specialist

Certified Divorce Specialist CDS

Contact me!

Reasons To Sell Your House Before the New Year

As the year winds down, you may have decided it’s time to make a move and put your house on the market. But should you sell now or wait until January? While it may be tempting to hold off until after the holidays, here are three reasons to make your move before the new year.

Get One Step Ahead of Other Sellers

Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and sometimes deprioritize selling their house until the start of the new year when their schedules and social calendars calm down. But that gives you an opportunity to get one step ahead.

Selling now, while other homeowners may hold off until after the holidays, can help you get a leg up on your competition. Start the process with a real estate agent today so you can get your house on the market before your neighbors do.

Get Your House in Front of Eager Buyers

Even though the supply of homes for sale did grow compared to last year, it’s still low. That means there aren’t enough homes on the market today. While some buyers may also delay their plans to move until January, others will still need to move for personal reasons or because something in their life has changed.

Those buyers are still going to be active later this year and will be seriously motivated to make their move happen because they need to. Unfortunately, the challenge they’ll face is a shortage of available inventory to meet their needs. A recent article from Investopedia says:

“. . . if your house is up for sale in the winter and someone is looking at it, chances are that person is serious and ready to buy. Anyone shopping for a new home between Thanksgiving and New Year’s is likely going to be a serious buyer. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sale.”

Use Your Equity To Fuel Your Move

Keep in mind that homeowners today have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $290,000. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.

And as you weigh the reasons to sell before year-end, it’s important to remember the reasons that sparked your desire to move in the first place. Maybe it’s time for a new home in a location that suits you better, one that offers the perfect space for you and your loved ones, or maybe your needs have evolved over time. A local real estate agent can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.

Listing your home before the new year can offer unique benefits. Less competition, motivated buyers, and your equity gains can all play to your advantage. Reach out, and let’s achieve your goals before winter sets in.

Marty Gale

Buy or Sell with Marty Gale

"Its The Experience"

Principal Broker and Owner of Utah Realty™

Licensed Since 1986

CERTIFIED LUXURY HOME MARKETING SPECIALIST (CLHM)

PSA (Pricing Strategy Advisor)

General Contractor 2000 (in-active)

e-pro (advanced digital marketing) 2001

Certified Residential Specialist 2009

Certified Negotiation Expert 2014

Master Certified Negotiation Expert 2014

Certified Probate Specialist Since 2018

Senior Real Estate Specialist

Certified Divorce Specialist CDS

Contact me!

The Perks of Selling Your House When Inventory Is Low

When it comes to selling your house, you’re probably trying to juggle the current market conditions and your own needs as you plan your move.

One thing that may be working in your favor is how few homes there are for sale right now. Here’s what you need to know about the current inventory situation and what it means for you.

The Supply of Homes for Sale Is Far Below the Norm

When you’re selling something, it helps if what you’re selling is in demand, but is also in low supply. Why? That makes it even more desirable since there’s not enough to go around. That’s exactly what’s happening in the housing market today. There are more buyers looking to buy than there are homes for sale.

To tell the story of just how low inventory is, here’s the latest information on active listings, or homes available for sale. The graph below uses data from Realtor.com to show how many active listings there were in September of this year compared to what’s more typical in the market.

As you can see in the graph, if you look at the last normal years for the market (shown in the blue bars) versus the latest numbers for this year (shown in the red bar), it’s clear inventory is still far lower than the norm.

What That Means for You

Buyers have fewer choices now than they did in more typical years. And that’s why you could still see some great perks if you sell today. Because there aren’t enough homes to go around, homes that are priced right are still selling fast and the average seller is getting multiple offers from eager buyers. Based on the latest data from the Confidence Index from the National Association of Realtors (NAR):

69% of homes sold in less than a month.
2.6 offers: the average number of offers on recently sold homes.

An article from Realtor.com also explains how the limited number of houses for sale benefits you if you’re selling:

“. . . homes spent two weeks less on the market this past month than they did in the average September from 2017 to 2019 . . . as still-limited supply spurs homebuyers to act quickly . . .”

Bottom Line

Because the supply of homes for sale is so low, buyers desperately want more options – and your house may be just what they’re looking for. Let’s connect to get your house listed at the right price for today’s market. You could still see it sell quickly and potentially get multiple offers.