Home sellers are expecting multiple offers on their homes and bidding wars that will enable them to fetch a much higher price than its current value, due to current housing market conditions.
It’s well known that the U.S. residential real estate industry is a seller’s market, and most homeowners who’re planning to sell believe they can take advantage of the situation. A recent survey of 657 homeowners who’re planning to sell within the next 12 months found that 24% expect to get more than their asking price, and that 29% will ask for more than what they believe their home is worth.
With the housing market so hot right now many sellers are looking to cash out. While personal motivations are usually the main reason why people decide to sell up, more and more people are looking to sell simply to make a profit, realtor.com’s survey found. Almost one quarter of the survey respondents said making a profit was their main reason for selling. Another 13% felt that they should try to take advantage of the seller’s market.
The survey results show that more people are noticing the today’s housing market conditions, which clearly benefit sellers. Home prices have shot up 17% over the last year, so much so that 94% of respondents stated that they expect to receive more than what they originally paid for their home when they sell it. Of those, one in ten expressed confidence they would receive double what they paid for their home.
Sellers are extremely optimistic overall. Around 16% said they expect a bidding war on their home once they list and that they’ll be able to choose from multiple offers, while 25% said they anticipate having an offer within the first week. Another 16% said they expect to receive an all-cash offer, too.
Homeowners are confident they’ll be on top when it comes to negotiations too. For example, 24% said they don’t expect they’ll have to pay anything towards repairs or improvement to their home, even if they’re needed. And 16% said they believe that the competition is so intense that buyers will be happy to waive contingencies around appraisal, home inspections and financing.
George Ratiu, senior economist at realtor.com, said that it’s clear to everyone that we’re in a strong seller’s market and that homeowners believe they will have the upper hand if they sell now.
“However, after a year of challenges which kept homeowners from listing their home, we are seeing sellers coming back and that should help moderate prices and bring more balance to the housing market over the coming months.”
As such, Ratiu urged homeowners who’re planning to list their homes soon to research the conditions in their local market first, so they can list their home at a realistic price that reflects current trends in their neighborhood.