For anyone looking to buy (or sell) their home this year, there’s a single word to describe the process: daunting. Inventory is down, interest rates are up and that makes it harder to swiftly land the house of your dreams. But all hope shouldn’t be lost: We chatted with Caitlin Barrett, COO, and Delyse Berry, CEO and principal broker, for Upstate Down, a New York-based brokerage that fuses together years of real estate and interior design expertise, about how to navigate the market in 2023.
The 5 Secrets of Buying and Selling a House in 2023
1. For Buyers: Stay Open to Diamonds in the Rough
In Barrett’s experience, this is one of the most important things for buyers to remember: You can’t judge a book by its cover. In other words, marketing materials (for example, subpar iPhone photos of the interior) often do homes a disservice and don’t properly display their potential. “It can take a lot of extra legwork, but making a point to see the home in person is often worth it,” Barrett explains. “You want to assess the bones of the home: How’s the structure? The utilities? What can be changed and what can’t? That’s what we encourage buyers working with our team to focus on.”
2. For Sellers: Turnkey Homes Are in High Demand
On the flipside, turnkey homes—meaning move-in ready and requiring no repairs—are definitely selling faster. “Homes like this are going for multiple bids over asking right now, depending on the location,” Barrett says. That said, they often get priced higher at the start since almost every detail is deemed to be in excellent condition (think new appliances and no signs of wear and tear). “It’s definitely a way to make your home a more competitive listing,” Barrett adds.
3. For Buyers: To Secure Better Financing, Opt for a Shorter Mortgage
A mortgage that’s 15 years vs. one that’s longer can be helpful when it comes to locking in a lower rate in this market, according to Berry. “We definitely aren’t loan experts, but we’ve seen clients secure better rates with this tactic,” she says. “It also helps to have a strong credit score or to lean on alternative lending options such as an LAL, which is a loan collateralized against your liquid assets.” Regardless of interest rates, Berry adds that it’s still best to base your purchase decision on what you can afford and finding the right property rather than waiting for the perfect market. (After all, refinancing is always an option if interest rates come down.)
4. For Sellers: Vignettes are the New Curb Appeal
Low-cost ways to spruce up the exterior of your home still make a difference, Barrett says. But there’s another method sellers are using to entice future buyers: Creating vignettes. “The goal is to create ‘moments’ around the house so that a buyer can walk in and visualize their life in those settings,” Barrett says. For example, in the outdoor space, set up a bistro table and patio umbrella or a chaise lounge next to a fireplace or near a reading nook. A minimal effort to stage your house before listing it can really aid in the sale.
5. For Buyers: Draft a Strong Offer, Not a Love Letter
You’ve probably heard about buyers penning a note explaining why the home in question has to become theirs. But according to Barrett, this is a real estate no-no in 2023. “When a buyer sends a seller a note, it’s actually a violation of fair housing laws,” she explains. “It’s technically not something a seller should consider.” Instead, a buyer should focus on doing what they can to strengthen their offer. “A lot of times, this comes down to contingencies,” Barrett says. “For example, a buyer could offer to do an inspection for informational purposes only and not using it as a contingency for the deal. You can also do something called an appraisal floor contingency, which basically means that if the appraisal comes in low, you’ll make up the difference with cash. In other words, you’re not dependent on the appraisal for the deal to go through.” You can also highlight your flexibility around closing. “If the seller really has a time or date they want to close, being flexible around that can help sweeten the deal.”