Selling a home or investment property can be a daunting task. You want to get top dollar for it of course, but it's also nice to get the money and close the sale as quickly as possible.
There may be certain instances when selling your property fast is actually a good idea, but more often than not, you'll be leaving money on the table by selling too quickly. The balance between a quick sale and the right price can be difficult. Read on to figure out when it's a good idea to sell your home fast and why.
Why would someone want to sell fast?
Real estate is very market dependent. High demand but low inventory drives real estate values up and may lead to bidding wars and fast sales regardless of price. Other markets may have a surplus of inventory with low demand, which leads to lower real estate values and longer days on the market before the property is sold.
How fast a home will sell will greatly depend on where the property is located and what the market is like at the given moment. In a balanced market, it's fairly common for a home to sit on the market for sale for 30 to 90 days before receiving an offer. Then there's the closing timeline, which can add an additional 30 to 45 days if the buyer is getting a loan. This means a homeowner or investor wanting to sell could be waiting three months or more to cash out on a property.
Selling a home fast means you adjust the terms, most commonly the price, to incentivize buyers to make an offer and close quickly.
When selling fast may be a good idea
Obviously there are times when money isn't everything. If you have an amazingly lucrative job offer that necessitates a quick move, you can simply look at the money left behind as money to be made in your new location. The home could be distressed and rather than repair it and list it on the market, it's easier to sell it quickly for cash now. If you're selling due to health issues, being out of work, a divorice, or death, it may also be easier on you, emotionally and financially, to simply sell quickly. Or maybe you're in a tough financial position and need cash quickly; selling fast can also provide you with money in as little as a few weeks. In all of these instances, there's a greater need to sell the home fast than there is for receiving the highest possible amount.
When selling fast is likely not a good idea
Selling fast in most instances is not a great idea if you're trying to get the most money possible. However, there are times, for example, in a seller's market, when selling fast could be a positive strategic move to get the most money possible while still closing quickly.
In this instance, the property owner would list the home slightly under current market value to incentivize multiple buyers to make offers. It's fairly common, especially in a strong seller's market, for there to be multiple offers driving the final sale price to or even beyond the market price. In this instance, buyers are motivated to close as quickly as possible, putting their best offer forward, and it can lead to a rather quick sale.
But if the market is balanced or shifted to a buyer's market, selling fast will necessitate a lower list price to motivate buyers to act and close quickly, which means less money for you.
How to balance price and speed
- Price the property right for the given market. If you're an outlier, buyers could either think there's something wrong with your house or that you are out of line and not likely open to negotiation. You should get a professional opinion from a Realtor, or more than one Realtor, as well as doing your own research.
- List in spring to sell in summer. When the weather warms, kids are out of school, and folks are already used to taking vacation time, you will likely have more buyers actively looking to move. If you don't list until summer and you have someone buying with a traditional mortgage, it may delay closing until right around the time school starts back up -- not ideal.
- Make it easy for the buyer to say yes. Have your home clean and well presented. Gain inspiration from professional staging or hire a professional stager. You want the prospective buyer who walks in to instantly fall in love.
- Maximize your exposure by utilizing the zero. Pricing your home on the upper and lower ends of multiple search brackets will get more eyes on the property. If you list your home for $300,000, you will probably show up at the upper end of a $200,000 to $300,000 search as well as on the lower end of a $300,000 to $400,000 search.
Cash sales are common for "a fast sale," but as mentioned before, selling fast doesn't always mean a price reduction. The key to getting top dollar in a reasonable time frame will be to get as many people into your well-presented home as possible. Take the time to get lots of quality photographs, write an enticing listing description, get it listed on as many sites as possible, even mention the open listing on social media, and consider having an open house to get people to physically visit your home. Selling a property can happen relatively fast, and getting a good price is absolutely achievable if you set the stage properly.