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Preparation and perspiration are great allies if the housing market shifts into a recession. Before facing the effects of inflation and a potential housing slowdown, now is the time to start planning a selling strategy to avoid costly mistakes if a recession occurs.
You might think it could be harder to sell your home during a recession – but it doesn’t have to be. To give you the best information about selling a house in a recession, we reached out to top-performing real estate agent Andy Peters, who sells properties 50% faster than the average agent in Atlanta, Georgia.
“When there’s uncertainty, there’s generally waiting, so you really have to wow buyers. If you’re a seller, you have to really get ahead of the market, and you have to wow them. Every day that a house is potentially on the market, the value of the house could be going down,” says Peters.
Besides emphasizing all the good features of your house, you also want to avoid mistakes that could potentially affect how much profit you’ll gain once your house is sold.
Here are the top 14 mistakes people make when selling a home in a recession:
1. Overpricing the home causing repeated reductions
When you overprice your home, especially during a recession, it’s one of the biggest mistakes that a seller can make. Overpricing leads to future price reductions, which can stall your home sale and place a stigma on your property listing that can act as a scarlet letter to buyers.
“The major concern when the property is overpriced is that you are wasting time on the market. And in a shifting market, time is not your friend. The longer something is on the market, the more a buyer believes something is wrong with it,” says Peters.
Peters explains that a house reaches its peak of value on the first day listed because it’s brand new at that point. Also, according to Peters, the average price point in a range generally is going to sell well as opposed to other high-end properties during a recession.
2. Being ignorant of the market
Understanding how the current market is performing, according to Peters, is important in order to establish an effective selling strategy, which includes determining your home’s value.
“In the recession that we’re potentially looking at now — and I’m just assuming that current market conditions will continue — we’re seeing price erosion. That’s mainly due to the fact that we’ve had two straight years of pretty wild increases.”
He explains that in the Atlanta market, home values experienced a 20% run up in 2020, a 15% run up in 2021, and now he’s seeing a 10% take back, which he expects to continue because home affordability is being impacted by rising interest rates.
3. Missing a big issue before the home inspection
Surprises might be good for parties but not home inspections. The last thing you need in a down market is to find out that you have a major foundation or electrical problem that has been discovered by the buyer’s home inspector. Issues that can jeopardize a deal will generally either need to be fixed or replaced due to financing requirements.
One way to protect yourself before getting an unwanted surprise is to hire your own home inspector to do a pre-listing inspection. These inspections typically cost between $280 to $401 but are often worth the expense if it helps to ensure your home sale won’t be in jeopardy.
One caveat regarding pre-listing inspections, state laws typically mandate that sellers must disclose known property issues to buyers. You’ll likely be required to disclose any major pre-listing inspection findings that you choose not to fix.
4. Settling on cheap, poor-quality listing photos
A picture can be a loss of thousands of dollars if it looks dark, blurry, or odd. Although snapping a quick photo with your cell phone is convenient, showing a toilet and nothing else, won’t generally entice the online home shopper.
While investing in a professional photographer might seem unnecessary, bad photos will discourage buyers from touring your home, and harm your marketing efforts. A great first impression is crucial and starts online for getting your house noticed in a positive way.
5. The house looks bad from the street
Bad curb appeal can definitely discourage buyers from touring a home when the first thing they notice is the deferred maintenance in the yard. If your yard has waist-high grass, dead trees, or rotting flowers, it can quickly curb their enthusiasm about seeing more.
An unruly jungle that requires hours to tame, unless they are dedicated gardeners, will also be viewed as added effort and expense. Professional landscaping can generally cost an average of $1,309 to $5,683. It’s an investment that can help you avoid this costly mistake.
Certainly pretty pictures are going to help, but the condition of the property is what’s going to hug them or, as we like to say, tackle them when they walk in the door, and it gets them to make the offer.
- Andy Peters Real Estate AgentCloseAndy Peters Real Estate Agent at Keller Williams Chattahoochee North Currently accepting new clients
- Years of Experience 15
- Transactions 1461
- Average Price Point $379k
- Single Family Homes 1022
6. Showing a dirty, messy, or stinky house
If your buyer takes one step inside your door and smells a stinky dog, sees potato chips on your couch, or stacks of papers on every flat surface in your house, some work needs to be done. Start moving out the clutter, unleash the doggy smell, and break out your mop and duster to properly uncover the square footage and welcoming space.
“Certainly pretty pictures are going to help, but the condition of the property is what’s going to hug them or, as we like to say, tackle them when they walk in the door, and it gets them to make the offer,” says Peters.
7. Turning down a last-minute showing
When buyers are few and far between in a recession, you need to be ready to welcome them for a last-minute showing. Because often, if they’re unable or don’t want to reschedule, they’ll move on to the next home listing and that will be a missed opportunity for you. Some of the best tips to prepare your home for a last-minute showing are:
- Turn on lights and open curtains
- Remove pet items from view
- Wipe down kitchen counters
- Vacuum and empty trash cans
- When you leave the house, take the dog
8. Not making the home move-in ready
Many buyers want to make the smart choice for their future investment, especially if they’re willing to buy a house during a recession. This is why move-in-ready homes, also called turnkey houses, will usually get the most attention.
If you’re able to renovate or upgrade your house, focusing on the kitchen or bathrooms to get it move-in ready, your efforts can often add more to your bottom line. Some renovations to consider can include:
- Fresh paint inside or outside using neutral colors
- Updated appliances including washer and dryer
- New programmable thermostat or alarm system
- Replacing the front door and adding new hardware
- Installing a new roof or HVAC system
9. Using a part-time or inexperienced agent
Trusting a brand new or part-time real estate agent with one of your largest assets, because they’re a friend of a friend, is a common mistake that will usually help them more than you. Selling a home during a challenging time requires someone who has a proven track record and a polished strategy to get the best results.
“Probably my biggest advice would be, don’t necessarily go with the agent that’s going to give you the highest price. Anybody can give you a high price,” says Peters. He recommends you interview and vet several agents before committing to a listing agent.
Our data shows that the top 5% of agents nationwide, typically sell homes for as much as 10% more than an average agent. HomeLight’s free Agent Match platform can connect you with the top-performing agents in your market.
Peters says when housing is very active, many amateur agents seize the opportunity, but they don’t effectively analyze the housing market and often many will leave when it cools down.
10. Leaving a broken window, missing knob, or stuck door
When buyers are shopping in a down market, they want the big repairs done but they’ll also notice everything else, including little details that need attention. So if a knob is missing on a kitchen cabinet, a door makes a horror movie creak, or a window won’t close, a little elbow or actual grease will go a long way to make those minor imperfections disappear.
This is an easy mistake to avoid when selling a home during a recession, or just when preparing to sell a house in a competitive market.
11. Box-filled rooms and walls of family photos
Family photos on the walls or multiple boxes that contain your glass figurine collection might say home to you, but not to potential buyers. Home shoppers usually need the literal space to be able to imagine how their photos and collections will look displayed instead of your treasures, which can distract their focus. Peters says staging a property can also be helpful when the market changes.
“You’ve got to get the buyer’s attention,” he explains. “You’ve got to really do all the right things and make sure that you don’t leave anything up to chance. It becomes more of a skill-based market, instead of an availability issue.”
12. Unwilling to give a little
If it’s between your house and a similar one down the street that’s offering a home warranty, that could make the difference in getting an offer or not. During a recession, any seller concession you can promote to reassure the buyer will usually shorten your days on the market. Some of the typical seller concessions can include closing costs, minor repairs, or fixtures to incentivize a buyer to say yes to your home.
13. Failing to stand out
Some sellers or inexperienced agents will inadvertently hide a home’s best features because they fail to include them in the listing. These are the items that will make your property stand out, such as skylights, a swimming pool, or a kitchen that would satisfy a top chef. These added amenities can be the secret sauce to make your listing unique and memorable so buyers will be curious to see more.
14. Underestimating the need for additional marketing
Having a marketing strategy from your real estate agent is to be expected, but there are many other ways a home can be advertised. During a down market, it can be valuable to expand your outreach by also using these strategies:
- Tell family, friends, neighbors, and coworkers about your listing
- Share the details of your home sale on your social media platforms
- Consider using direct mail marketing strategies
- Post flyers at local shops, gyms, and community centers
- Market directly to residential real estate investors
Q&A: More expert insights for selling a home during a recession
When is the best time of year to sell a home during a recession?
Timing is everything and choosing the right month to list your home can make a difference in the number and quality of offers you receive. Typically, if the weather isn’t cooperating, with either heavy snow or blistering temperatures, the foot traffic will slow down. One way to determine if it’s the ideal time to sell your home is to use HomeLight’s Best Time to Sell Calculator. By using real estate transaction data in your market, this free tool can help you determine the best and worst months for listing your home.
Is there value in knowing what other home sellers are doing?
When buyers are in limited supply and other houses are for sale in your area, it can be helpful to know what they are offering in order to effectively compete with them. Visit open houses to see what upgrades are being featured and the final sold prices of nearby houses. Your agent can help identify these properties with a comparative market analysis (CMA). This will give you a better idea of what buyers are looking for and what they are willing to pay in your neighborhood for their next home.
How do I sell my house fast in a slow market?
If you find you need to sell and move immediately or don’t have the money for repairs, sometimes it’s a better option to request an all-cash offer from an iBuyer (instant buyer) or We Buy Houses investor. One proven option is HomeLight’s Simple Sale platform. It’s a fast, convenient way to get a no-obligation cash offer for your home. Just answer a few questions about your property and you’ll receive a no-obligation cash offer in as few as 48 hours. You can skip repairs and showings, and close in as little as 10 days.
If selling a home during a recession, have a plan that will pay off
Don’t overprice your home: Find the right price so your house doesn’t sit on the market too long
Keep your house ready to show: Remove trash, and take the dog with you during a showing
Clean, declutter, and landscape yard: Get your home to a move-in state that will attract more buyers
Know more about your competition: Get a CMA and review nearby sold homes, features, and prices
No matter the market, having a top-performing real estate agent is the best way to plan an effective and profitable home-selling strategy. To partner with a proven real estate professional in your area, use HomeLight’s free Agent Match and get started today!
Header Image Source: (Roger Starnes Sr / Unsplash)