POTENTIAL INCREASE IN INTEREST RATES
Interest rates have already doubled vs. last year, and they may continue to move higher. That’s because the Federal Reserve has phased out its massive pandemic-era bond-buying programs. If interest rates continue to move higher, it could price some buyers out of the market. This means that your house may sit on the market for longer or you may have to settle for a reduced sales price.
Additionally, rising interest rates could impact you if you plan to use a mortgage on the purchase of your new, replacement property. For example, on a $500,000 mortgage, a 1% increase in interest rates could cost you over $100,000 over the life of your mortgage.
A STEEP DISCOUNT MAY NOT BE NEEDED IF YOU SELL TODAY
The average sales-to-list price fell below 100% recently, meaning that the average house today is selling for less than the list price. In some cases, sellers make “concessions” or offer to pay the buyer’s closing costs in order to make their home more affordable. In other cases, they simply agree to sell the property for below the list price.
If the market continues to slow down, a steeper discount may be needed in order to sell your property. So, even if you list your home for the same price under different market conditions, you may have to offer a bigger discount to sell it. For example, an additional 5% discount on a $500,000 home could cost you $25,000.