So, what does all of this mean? Most property owners we speak to all say the same thing. “We
don’t HAVE to sell.” Which is very true, especially when a seller is not physically moving from
the home. The main reason they say that is because the pricing strategy presented in
alignment with the current market statistics is typically lower than they had hoped for.
It’s no secret, the Northern Outer Banks market is still in the midst of recovery, now with a
rising inventory. We’ve tracked these cycles for many decades and the results are always the
same. It’s a 20 year cycle. If the major down happened in 2009, we are merely half way
through before the next possible boom, based on recorded history.
Now, if you find yourself in the very common situation of having a home here on the OBX that
you aren’t using as much anymore, don’t like the current market price, and feel like you don’t
have to sell it, here’s what you need to know.
What exactly are my options if I don’t have to sell?
- 1. Recognize the big picture. Just because you don’t HAVE to sell, does not automatically
mean that keeping the home is the best financial decision. Talk to your financial planner
and tax advisor and get their opinion of the big picture financially. - Consider the amount you personally use the home. If you’ve gotten to the point of
only visiting the home once a year, it could actually end up costing you more in the long
run to keep it. We have very extreme weather on the Outer Banks. Homes left alone
with deferred maintenance can often times develop big ticket repair items the longer
they sit. - Place the home in a trust. If you have children who are available and willing to step in
and take over the management of the home, there could be some tax advantages in
your estate by leaving the home to them in a trust. Check with a tax advisor for more
detailed information. I found this article helpful as a starter. - Consider making improvements. Outside of the economic market conditions of supply
and demand, one of the other reasons some homes are experiencing a challenge on
pricing is due to being in the original state. Buyers today have very different
expectations of homes than they did when I started in 1997. If you are planning to keep
the home for a few more years, do the improvements, enjoy them, then sell when you
are ready. One word of caution, consult a real estate professional first so they can help
you maximize where to spend your money so it makes the most impact to a future
buyer. - Place the home as a year round rental. Yes, that means less income overall. It also
means less expense. Tenants in a year round situation generally pay their own utilities,
do the cleaning, change the filters and more. There is a huge shortage of affordable
year round rental homes in the area. This is also something you can manage yourself,
with very little time and energy. Hire a maintenance guy to check on the place and
handle the minor issues that come up. If you’re already not using the house, why not
have just one family enjoying it year round. - Consider short term retirement in the home. So many buyers I’ve worked with over
the years actually bought the home for future retirement. It’s unclear why more don’t
actually do it. However, if you decided to just retire here for 5 years, enjoy the beach,
do some improvements, the home could have a much different value then. - Take a closer look at what the home is costing each year to own. This is probably the
best advice I can give. More often than not, the amount needed to price strategically
compared to the amount it will cost to own the home for another 3 to 5 years is usually the same. I know it can be challenging to drop that price another $25,000 in order to
sell, but what will it cost you to own it annually for the next 5 years? That’s not
including any major deferred maintenance that will come up along the way.
The truth is, timing is everything. If you’re ready to sell, take a serious look at these options
and decide the best course of action. First of all answer the most important question I
presented in the beginning….
Just because I don’t HAVE to sell, does that mean keeping this home is in my best financial
interests?
When you commit to looking at the big picture, as well as all other possible options and
calculate the best move for your situation. If you need help discussing these or any other
strategy, please feel free to reach out!
