How to Sell your House in a Recession?
If you are one of many homeowners looking to sell their home during the recession, you face a great challenge. You may think, "It's time to sell my home," but the economy might suggest otherwise. Yet, thousands of homeowners have success — with the right methods.
Is a Recession a good time to sell a house?
Home sales during tough economic times can be difficult for a few reasons. First, you may find that the market has changed dramatically since you purchased your home. The dividends from your real estate investment may not be as much as you had hoped. In some situations, you may even discover you are "underwater," meaning you owe more on your mortgage than the property is worth on the market.
Beyond impacting the purchase price, recessions also create reservations in buyers. They may love your home but hesitate to spend all the time and money that goes into buying a property. If their job is not secure, they may not even be able to successfully apply for a mortgage.
Most real estate professionals recommend not selling during a recession, but sometimes there’s no alternative. Difficult family situations or a new job may require a move immediately. Alternatively, you may need to access the equity locked into your home to pay your bills.
Wondering how to position yourself to successfully sell your home in a recession? Read on.
Expect Fewer Buyers
A recession, by definition, is a time when the economy slows. That means fewer people are making big purchases. They may not be making as much money, so they could be concerned about being able to afford a new mortgage.
As a seller, it's easy to get concerned and worried if only a few people come to an open house or your agent doesn't have any leads.
Adjust your expectations to fit the current market, and stay positive. Remember, a recession can also make fellow homeowners hesitate to put their homes on the market in competition with yours. Mortgage rates are usually lower during a recession as well. It's definitely not a lost cause.
Be Realistic With Your Asking Price
The asking price is, by far, the biggest indicator for successful home sales in a timely manner. You may have hoped for a certain amount for your home, but recessions cause housing prices to drop dramatically. If you ask for too much, you will have even fewer potential buyers.
You may be able to throw in some additional benefits to entice buyers to consider your home. Are you willing to add in furniture, a pile of freshly cut wood for the fireplace, or flowering plants for landscaping? It also might make sense to offer to pay closing costs. These relatively low costs to you might mean the difference between a sale and no sale.
Clean and Fix Any Issues Beforehand
Frequently, homeowners erroneously think that buyers will understand that some work will need to be done to the property. However, in a recession, "fixer-uppers" and homes with glaring problems will get passed over for houses that are ready for a move-in.
Clean up messes in basements, backyards, mudrooms, and other places that tend to get overlooked before putting your house on the market. Fixing minor items like faulty light switches can also have another benefit: home appraisers will be less likely to reduce the appraised home value after their in-person inspections.
Adding what is frequently called "curb appeal" can't hurt. While savvy buyers know that a fresh coat of paint is only superficial, it may be enough to get them in the door and talking about your home's other great features.
Increase Marketing Efforts
In some markets, all it takes to sell a house is a sign out front. In recessions, however, you need to be more aggressive with your marketing efforts.
Whether you've hired a real estate agent or are planning to save money by selling your home yourself, focus on creative ways to spread the word about your sale. Start by taking well-lit pictures of all the rooms in your house. Make sure to clean up any clutter beforehand.
Using these photos, create advertisements online that can be shared among your network on social media. See if there are opportunities in your local newspaper or public spaces where people post real estate news. Create flyers that highlight the best things about your home and leave them on bulletin boards around town. Make the extra effort, and watch your work pay off.
Sell on Your Own Time
Of course, some homeowners are too busy or overwhelmed to put in all the time required to sell a home during a recession. When times are tough, you may be struggling to pay bills along with the other challenges of life, including family, relationships, and health.
If you need to access the cash that's locked into your home equity quickly, it's worth considering other options to selling in a traditional market. For example, Easyknock's Sell & Stay program allows homeowners to immediately sell at the appraised home value and move out when they are ready. That way, you won't have to disrupt your life to get your cash to pay for other expenses.
These kinds of programs are especially important as banks begin to get more selective regarding their loans. If you've done all the work to secure a buyer, only to see the buyer unable to get financing, you are wasting time.
Don't Wait If You're Ready
It may seem wise to wait until the recession is over to access the equity tied up in your home, but that's not always possible. If you are at risk of foreclosure or another economic hardship, you should be proactive about finding solutions, such as EasyKnock’s Moveability program. Otherwise, you may be forced to deal with an issue with your title or other circumstance that makes it even harder to sell your home.
If you are hoping to buy another home while selling your own, you will be on both sides of the real estate transaction. Take your time and do your research. With the right team of professionals to guide you, you can secure your financial situation and meet your long-term goals regardless of the economy.