In San Francisco and Wine Country it remains a Sellers market. Buyers are competing for property and it appears that Sellers have everything to benefit. There are challenges for sellers to be aware of to make the sale a complete success.
FINDING A NEW HOME?
During a Sellers market, inventory is low. Make sure to locate your next home before or during your sales period. Will the equity from your sale allow you a jump up in home value in the same area where you are selling, or will you find that moving to another location stretches your home purchase dollars further?
Unless you are purchasing your next home in cash, you will need to qualify for a new mortgage. Are your reserves, down payment and the equity you gained from the sale of your home enough to purchase the next home of your dreams? Make sure to know the price point for your home search as it applies to your loan qualification.
Try not to make the sale of your home contingent upon finding a new home. Making this part of a purchase contract can turn-off potential buyers who may also be working with a timeline to make their purchase quickly.
Scout neighborhoods and locations for your home purchase to determine if homes are available for purchase in your price point. Don't get caught with a loan and no home to purchase. Ideally when escrow closes you will want to move into your new home.
ACCURATE PRICING & APPRAISAL:
In dreaming about your next home, you are reviewing all that you have done to care for your home, the upgrades and sweat equity you have put in and are counting on the final sale price of your current home to fulfill your financial expectations for the purchase of your next home.
This is a dangerous way to approach home valuation. It is better to see what the market bares. Ask your agent for a comprehensive market analysis of homes that have sold that are like yours. Remember if you overprice your home, you may see less activity, attracting fewer potential buyers, delaying your sale and risking real estate market changes. Likewise, if you underprice your home and multiple offers flood in, it may create a bidding war escalating the winning bid to an impossible amount, one that won't meet the appraisal value for the home or property.
Your best bet is to carefully review current market reports and field your agents pricing suggestions to arrive at a true market value for your home. When priced appropriately, your home will appraise, the buyers loan will fund and you will be on your way.
Instead of the extra funds you thought you "should" receive for your home, choose your next home wisely. Look for an area where home equity is sure to rise in the future, or find a home that begs for upgrades...the worst house on the best block. There are other ways to gain the equity you believe you lost by pricing your home at true market value.
Cynthia Palmer, Realtor with Vanguard Properties, is a lot city and a little bit country representing buyers and sellers of fine homes in San Francisco, Sonoma and Napa Wine Country. Connect with Cynthia to find out more about how to achieve success when buying or selling your home in the Bay Area.