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What does it take to sell in a slower market?

Last month I reported on how our market finally slowed down to the point that you might even consider it a buyer's market. The months of inventory is now at 2.7 months - the highest it has been since November 2018. Great news for buyers, but what does it mean for sellers? I find myself playing the therapist now more than ever to panicked sellers who have emotionally spiraled into a dark place thinking they have missed the boat forever and it will be impossible to sell.

First, my advice in any market is always the same: don't sell or buy based on what's going on in the housing market and buy/sell when it makes sense for you. This applies to investors too. I feel like a broken record I say this so much, but it's really the cornerstone of my real estate philosophy because when people act based on what the market is doing it tends to be based on one emotion - fear - rather than thoughtful consideration or a rational response to a major life change.

But let's say, for whatever reason, it DOES make sense for you to sell your home right now. Maybe you are expanding your family and need more space. Maybe you got a job offer in another state. Maybe you are getting a divorce. Whatever your reason, it's very possible to sell your home in a buyer's market -- I have successfully done it with several listings since this whole slowdown began in April. Last month, typically the most sluggish sales month all year, there were still 2,868 homes sold in the Austin area.

But that doesn't mean it's a walk in the park. Here is...

Five Things to Know About Selling In A Slow Market:

1. First, do you need to sell? Maybe it makes sense to rent. For some people, renting for a few years is a great solution, particularly if they have not owned their home for very long. For other homeowners, they need that equity from their property to either buy a new home or pay off debts. This is what I help clients with - analyzing what the best approach depending on their situation.

2. Condition really, really matters. When inventory is up, buyers have more choices. And that means they can be picky. Really picky. So investing in upgrades that deliver the best return on investment is important. Some of the common ones I recommend are new paint and flooring. Working with a professional stager is also super important - I hire a stager on all my listings. It's also vital to know the age and maintenance status of things like your roof, HVAC and water heater.

3. Be realistic about how long it takes to sell. Now that we're in a slower market it's going to be more common for homes to take a month or two to sell, sometimes after one or two price drops. That's actually how other markets in this country have functioned for a long time, but Austin just isn't used to conditions that are so buyer-friendly! Patience is key - and a good Realtor will advise you on when it's time to consider a price drop versus staying the course or pulling it off the market and trying again another time.

4. Accurate pricing is key. Hello, this is why you hire an experienced full-time Realtor who has their finger on the pulse of their local market. Pricing your home at, or even below, where the market is the moment you list your house is so important. Not where the market was last March - where it's at TODAY. It's the difference between selling in a few weeks and selling in a few months after multiple price drops.

5. Have a bottom line price and Plan B. When selling in a challenging market, you need to have a "bottom line" price in mind. This is the number you need to hit in order for selling to makes sense for you. This is not the same as your list price. If your home is sitting for more than 3 months, and even your bottom line price isn't drawing buyers, then you will know it's time to move on to Plan B. For most people, Plan B means renting but it can also mean not selling and staying. (During the 2008-2009 Great Recession, for some people Plan B meant walking away and going into foreclosure. Fortunately, our market is nowhere near that dire.)

Finally, I'll end with: I know what I'm talking about y'all. I love sharing the horror story of selling my first house in a buyer's market in Florida in 2014. It took us two months and lots of showings and we only walked away with $3,000 profit! And the people who sold us the house four years prior had to bring $20,000 to the closing table just to close because they were so underwater on their mortgage. 😱

Sometimes I have to gently remind my disappointed Austin sellers that it's not the end of the world to "only" have $100,000 from the sale of your home. I would have given anything for that amount of money when I sold my Florida home! It was a lesson learned for me that real estate is never a guaranteed "good" investment.

Five Things To Read

1. Homes sell for more listed on an MLS

One of the country's largest MLS (Multiple Listing Service) systems, called Bright MLS, did a study on whether homes listed on the MLS or off-market sold for more money. They concluded that homes listed on the MLS sold for 17 percent more than homes listed off-market. Bright's coverage area includes Washington, D.C., Baltimore and Philadelphia. There are some flaws with their analysis, mainly that the pool of homes listed on the MLS is larger than the off-market homes. Still, it bolsters what I generally believe: most sellers are better off getting maximum exposure on the MLS.