If you are looking to sell your house in Colorado Springs, then here are the ten things you should know before you start your research:
1. Demand is Strong.
Sellers are still expect to get a premium for their houses, especially in Colorado Springs, where the demand for homes is greater than most of the rest of the county.
Experts from the latest Home Price Expectation Survey from Pulsenomics are forecasting an average annual appreciation rate close to 3.2% over the next five years. The historical average is 3.6%.
The strength of the market now means that you have the advantage in selling your house now, while demand are home prices are still high.
The National Association of Realtors (NAR), in their newest Buyer Traffic Report, showed that demand is still strong for homes across most of the county.
These are qualified, willing and able buyers who are searching for homes today. In strong buyer demand markets in the country, often a house will have multiple offers from multiple buyers at once, so the competition is stronger.
Colorado Springs is one of these cities, so as a seller, you have the opportunity to take advantage of this hot market.
2. Competition with other homes is lower, but it will increase.
A normal housing market has about 6 months of housing inventory. We still have a shortage of supply of homes for sale (4.2 months). What this means is that there are too few homes for sale for the amount of buyers that want one.
In past generations, homeowners would live in their house for an average of 6 years, but since 2011, the average number of years someone has owned their home has risen to between 9 to 10 years.
Now that we have regained the equity in our homes, for those of you who kept your home during the 2008-2012 recession, now have the option to sell and make a profit, or at least not lose money.
In the past few years, many homeowners have been afraid to sell, wondering if they would be able to find a replacement home. This problem is increasingly disappearing as more higher end homes come on the market.
Don't shoot yourself in the foot by waiting too long, as you may compete with other homeowners who are thinking the same thing. If you've been considering it, get in while inventory is still low!
3. The transaction process will usually go more quickly.
Because there are a lot more buyers in Colorado Springs, buyers are doing everything they can to stand out amongst their own competition. This means that more buyers will have gotten their paperwork with their lender submitted already and you'll generally have a quicker closing.
4. Now is the best time to upgrade.
If you have plans of upgrading to a higher end or luxury house, it's a great time to do that! There is a higher inventory of luxury and premium houses for sale now, which puts luxury homes in a buyer's market.
So if you are planning to sell your house in Colorado Springs, it will sell more quickly and you'll also have an easier time finding your dream home.
Also, CoreLogic predicts that home values will increase 4.8% over the coming year. If you decide to wait to sell and buy, your downpayment and your mortgage payments will both increase.
5. Remodel, or sell?
Lots of things can change in your home. Your children might have moved out, or you might be expecting your first kids. You might be bringing in family members. Whatever your situation, you likely have some ideas about remodeling, or selling so that you can find a house that better suits you.
It's clear that remodeling/renovating is a popular choice, but it's not the only one, or necessarily the best one.
If you, at all, have thoughts about selling your home in the future, you might consider how your remodeling ideas might affect your home's value, particularly in your neighborhood. What kind of people live in your neighborhood? Say your neighborhood has a lot of families living in it. Do you really want to combine two bedrooms into one big one? Sure, it'll be an impressive master bedroom, but is that going to be a desireable feature in that neighborhood if you do end up selling?
According to research studies, remodeling only recoups 64.4% of the money you spend on improvements and changes to your home, which means that, without doing any remodeling, your house already be at the highest value it can be.
In that case, it's more logical to sell that house in order to get one that is already a lot closer to what you are envisioning for your forever home.
Also keep in mind, the less your square footage, the less property taxes!
6. Keep an eye on the mortgage interest rates.
With interest rates being as low as they are (close to 3.5% now), your interest rate affects your purchasing power as well as your monthly housing costs.
Purchasing power is how much house you can buy with your budget, and when the mortgage interest rates increase again, and they will, how much house you can get will start to diminish if you keep your budget the same.
No one knows if mortgage rates will stay this low, but historically, they are always in fluctuation, and it will be tough to get to these low rates in the future.
7. The housing supply is low, and home values are increasing.
No one knows if this appreciation in home values in Colorado Springs will continue at it's current rate. Home values have continually increased over the past seven years. Colorado Springs inventory also dropped from July 2015 to May 2018, but that is starting to improve.
8. Will we see another recession?
There is the fear that we will see another recession that also see home dropping sharply in values. However, the market and investment strategists and economists who scared us with this initial thought were also the same people who told us that home values will continue increasing for the next fives years, but not as quickly as they have been.
Presentation and image is one of the most important things you can do for your home when putting in on the market. Although competition is low, it is still present, and not only that, but just how much you can get for your home is determined in part by how a buyer feels when entering your home.
Buyers are emotional too, and a clean, organized house make a vastly different impression on them to a cluttered house.
The fewer things you have in your home, such as knick-knacks, wallpaper, hangings on the wall, and overall too many things in the home, prevents the buyer from imagining their own things in your house.
Marie Kondo wrote a great book, called The Magic Art of Tidying Up, which is also a Netflix series.
A good summary of the information in that book/series is: if it doesn't bring you joy, let it go.
First impressions are highly important when you sell your house!
10. For Sale By Owner (FSBO) is a horrible idea.
With the advent of Zillow and ease of access to homes online, many homeowners feel that they can sell their house by themselves. Here are five reasons that for sale by owner is not a good idea, although many try:
A. 50% of buyers come from the internet, with 28% coming from a real estate agent directly. A lot of buyers rely on their agent to find homes for them, so you may be alienating them by not listing your home through the MLS channels.
B. It comes with a lot of stress. You are taking on an additional full-time job, and on top of negotiating a deal with the buyer, and the paperwork, you must also negotiate with the buyer/s, who wants to get the best deal they can, regardless of what you want, and then you have the buyer's agent, sometimes the buyer's attorney, and negotiating the home inspection and the appraisal.
Do you feel comfortable with doing all that? A lot of people don't realize just how much extra work this will be, and they end up relisting with a real estate agent.
C. Contractwork gets more complicated each year, with the changing regulations and disclosures increasing dramatically. Admittedly, For Sale By Owner has dropped from 19% to 7% over the past 20 years, which is the lowest percentage of FSBO's since the NAR started recording the numbers in 1981.
D. You will make more money with an agent. Most buyers who choose to write an offer on a For Sale By Owner know that you are saving money because you're not using an agent, and they will use this as a negotiating factor to give you a lower offer. There's a secondary reason for the lower offer too, as it's expected that there will be more problems and headaches since there are no professionals assisting with the sale.
Collateral Analytics stresses that: "Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool."
What's more important to you, time or money? Are you willing to take on the risks and challenges of managing the sale over the next 30 or more days, not including the time the house is on the market? Is saving the money worth the extra stress and headache?
If you would like to sell your house in Colorado Springs, then you can also download my free seller's guide to selling your house below:
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I have been a real estate agent since 2015, and still going strong. I run this blog as a side hobby to my main job, and I try to make this blog as helpful and informative as possible. I'm always open to suggestions and feedback!
If you are looking to sell your house in Colorado Springs, CO, and would like to speak to a real estate agent, please contact me on my contact me page, or visit my main real estate site for Colorado Springs. I hope to see you in a new home!