It’s a seller’s market in California and across most of the nation as low inventory and rising prices give sellers some major advantages over buyers.
But despite these advantages, sellers still report feeling challenged and dissatisfied with the selling process, according to a recent Zillow survey.
The nationwide survey found:
- 33% of sellers report being unsatisfied with the process;
- 50% of sellers had to lower their list price before selling;
- 75% of sellers made at least one concession, most often lowering their list price or making repairs; and
- 78% of sellers made improvements before they listed their homes.
Sellers also report feeling severely stressed by the selling process. New house tour apps allow buyer’s agents to leave feedback about what buyers liked (or more often, didn’t like) about the seller’s home, causing anxiety and frustration for sellers.
Another stress for sellers is buying their replacement home. In today’s fast-moving housing market, it can be difficult to time the sale of one home with the purchase of another.
Zillow’s survey finds it takes an average of about four months to buy a home, but eight months to sell a home from preparing to sell through closing.
There’s little wiggle room for hiccups in the buying or selling process when competition is tight. Further, sellers are less likely to accept an offer to purchase when it’s contingent on the sale of the buyer’s current home.
The value of the seller’s agent
Where are the sellers’ agents in the midst of all these seller challenges?
The good news for real estate professionals: 82% of sellers who used an agent reported that they appreciated hiring a seller’s agent, who can help sellers with the many challenges they report experiencing.
The bad news: sellers are increasingly attempting to go it alone when it comes to selling.
Overall, 36% of sellers reported attempting to sell their home without an agent, though only 11% actually succeeded in 2017. The remaining sellers eventually turned to help from an agent.
The Millennial generation of sellers is most likely to attempt a for-sale-by-owner (FSBO). A significant 57% of Millennial sellers first attempted to sell without an agent in 2017. In contrast, only 32% of Generation X sellers and 19% of Baby Boomer sellers first tried a FSBO.
Millennials are more comfortable with doing things without the aid of professionals. The advent of online listing aggregators like Zillow, Trulia and Redfin give tech-savvy Millennials an edge over previous generations. But perhaps the bigger reason more Millennial sellers first attempt a FSBO is due to the shorter time Millennials have owned their homes compared to Gen-X-ers and Baby Boomers. Their homes haven’t had as long to appreciate, meaning smaller margins when selling.
But agents have less to worry about here in California. The sheer magnitude of price increase over the past few years makes hiring a seller’s agent an easy choice in 2018. The statewide average annual price increase is 8%-11%, depending on the tier of home sale. Thus, even if a seller owns their home for one or two years before listing, appreciation will easily cover their agent’s fee.
California agents — What challenges do your sellers face, even in today’s seller’s market? And is today’s hot market causing more FSBOs in your region? Share your experiences in the comments below!