The pandemic has been an extreme example of how the real estate market can create a windfall for sellers who were prepared, after years of seeing their neighbors unable to get their sought-for prices for their homes. For those who see a specific window opening next year or five or 10 years or more out, there are things to be thinking about today to put you in the best possible position when you arrive at that threshold, says Candace Adams, CEO of Berkshire Hathaway HomeServices New England Properties, which has its main office in Wallingford among nearly 50 in Connecticut. (This interview has been lightly edited for clarity.)
For those thinking of selling in 2022, what should they be doing now?
The first thing they want to make sure is that they get their photos in before winter comes. You want to make sure that you hire a professional photographer, but first go out and interview agents and get one, because they can organize that. Get your photos taken, stage the property. It’s very difficult to find contractors right now — if there’s anything you need to have done to your house, you need to schedule it now. Even appliance deliveries take a long time right now — high-end refrigerators, dishwashers.
You want to get stuff out of your home — put it in a pod or in storage. If I was looking to move next year, I would probably put my house on the market by December, the way the market is going now. We are going to see interest rates rise, so your buyers are going to be fewer going into the new year.
If possible, buy a house or find someplace to rent before you put your house on the market. You want to know where you’re going to go, so now is the time to find a place because that could take a while.
What about homeowners thinking five years out or more?
Any updating they think they need to do, I would start that in motion now. Builders are very busy and so you want to get in the queue to get things done.
A kitchen renovation won’t necessarily get you your money back if it’s really expensive. Landscaping is really the highest return on investment, and it gives you a few years to let it grow in. You want landscaping and your exterior to be perfect. If you want to discount your property — don’t do anything.
Get maintenance contracts on your major appliances or systems. HVAC, furnace — make sure you get somebody in there and it’s running properly, and get a service contract on it so you have a history of servicing it to show your buyer. It’s too soon to have a home inspector or appraiser come in — that’s more of a 12-to-18-month window. But if you really want to do your due diligence, get one in there.
I’d wait until the last moment on anything I knew I could get done — do it at the end.
Real estate trends in the neighborhood — should that drive timing?
If you are in a buying frenzy like right now and your neighbor just got higher than what they listed for, and you know there are 30 buyers out there, you may want to put your house on. It’s all relative — if a great house is sitting there, you may not be able to compete with it. You can time [the market] if you are ready to go. But it does take an expert to read the nuances of the market, to read those signs that the average seller won’t pick up on.
Should you test the value of your home by putting it on the market well in advance of when you plan to move?
I don’t think it’s healthy to do that. Quietly marketing the property is not in the best interest of the seller. You want the biggest exposure you can possibly get, at the best price to drive multiple offers. You’ll get more money today if you price it at the market than you would if you inflate it ahead of the market.
What about long-term financial planning for the sale of a home?
You have to think about capital gains, obviously, depending on the price of your property and where you plan to go. You have to think about whether you are going to need a mortgage going forward. If you are buying a second home or vacation property or investment property, you need to think how that financing would work, and what kind of money you would need for cash to put into it.
Any thoughts on buying a future home far in advance, and renting it out until the time comes to move?
That’s always an option, and a good one right now because rental prices are great and with a mortgage you are getting a low rate. But you are also paying top dollar for it. I have always been of the mind that you are better off buying at a low price with a high interest rate and carrying it for a while, then refinance as rates come down, because then your principal is lower than it would be if you bought at the top of the market and lived in it for a long time.
If you are planning to sell in the long-term, it’s just plotting out your renovations — what you need to do to make it as saleable as possible — and watching your market area. Hire a broker — and I don’t say that just because I’m in the business, I say it because I know what I know, and I know what I don’t know. There’s a lot you don’t know if you’re not in the business.