Housing Inventory Near All-Time Low, Seller's Edition

Housing inventory is near an all-time low, but what does that mean for homeowners considering making a move?

Sellers find themselves in a great position in this market. With interest rates slowly rising and buyers flooding the markets looking to take advantage of the rates while they're still low, sellers are finding themselves choosing between offers rather than hoping to receive just one. As a seller you have a couple of options in this unique market in regard to pricing.

1) Price your home at market value: What we've seen in this market is that if you price your home at market value you will generate a ton of interest in your property and most likely wind up with a bidding war on your hands that very well can cause your home to sell above it's value. The only problem in this scenario is often times the buyer will have to come up with more money at closing because the bank appraisal will come in less than the sales price. It is important to have your realtor look over the details of the contract and put a contingency in the contract that the buyer will agree to pay the difference between sales price and appraisal at closing. This will deter any speed bumps in the closing process.

2) Try to stretch the market: in areas where there is very limited inventory for your specific home, you could potentially try to stretch the market and see what it will bear. However, I would recommend not overpricing too highly because in that case you'll have nobody even taking a look at your home. Again, you could potentially deal with appraising problems if you effectively stretch the market, so it's important to put necessary contingencies in the contract.

If it were my house what would I do? I'd price my home at fair market value and have as many potential bidders get involved as possible to entice a bidding war. Once a bidding war breaks out there's no telling where it can go, and you can REALLY stretch the market in this scenario. Keep in mind the most action on a home is in it's first 6 weeks on the market so pricing at fair market value will catch the publics eye and have the most people interested as possible.

-Kyle Kovats, New Jersey Realtor
NorthJerseySuburbs.com