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According to agents in HomeLight’s quarter four survey, sentiment is somewhat split on an upcoming recession—something that would absolutely affect home sales. About 36 percent of agents surveyed expect we will see the economy drop by the end of 2021, but 12 percent think that it’s going to hit by the end of 2020.
Sellers aren’t super concerned though; agents note that about 70 percent of them never even bring up the idea of a recession. But regardless of an incoming recession or not, selling your home will pose some unique issues in the next year. Here’s what to expect as the most difficult hurdles you’ll need to overcome.
Overpricing
As was the trend in 2019, the biggest challenge for sellers in 2020 is overpricing. It’s a strong temptation to price your home too high—and you may not even realize you’re doing it—but it leads down a road you don’t want to be on. Buyers are observant, and will know if you’ve overpriced your property. That will lead to lower offers than you want, and could make you consistently have to lower the asking price. And that looks bad, like something is wrong with the house, so you may end up getting low balled and stuck with a house you don’t have money to keep for even longer.
Increasing Repair Requests
Buyers have been getting pickier and more demanding about what they want in a home they’re planning to buy. In 2019, 14 percent of agents reported that there were more repair requests from buyers than normal. They wanted a variety of things fixed: structural defects, safety concerns, and code violations. Agents expect this trend for increase repair requests to continue throughout 2020.
Appraisal Issues
About a quarter of home sales get delayed due to appraisal issues. The appraised value can come in way lower than you’re expecting, which can lead to buyers either bailing, or asking for a lower price overall. Or it could mean that there’s something wrong with your house, like severe structural damage, that you didn’t know about. Either way, it will lead to longer selling times and lost money. One way to avoid it? Get a pre-listing appraisal so you know how to properly price your home.
Process Length
Selling a home has a lot of moving parts, and each of them can take a seemingly endless amount of time. With a perceived upcoming recession, not many people will be looking for a house—and the process takes less time the more people are wanting to buy. Once you decide to sell, you’re looking at 3 to 5 days to get it listed, 30 to 60 days for offers to come in, and up to 50 days for closing. On the quicker side, that’s about 80 days. In a market with a recession? It can take even longer than the averages listed here. Problems throughout the process, too, can make it take even longer. Be prepared to be in it for the long haul, and have a contingency plan in place for if your home doesn’t sell by the time you need it to. It’s unfortunately a very real possibility it could happen.
