Want to sell your house? Rhode Island real estate agents share what you need to know

Here's what to know if you're looking to buy a house in this market 

Here's everything you need to know about today's real estate market in Rhode Island

While homebuyers normally get all the real estate attention with news about mortgage rates and low supply, the market has changed for sellers, and real estate agents say they have some advice for would-be listers.

Bidders ignore overpriced homes

Increasing mortgage rates are pinching budgets of would-be buyers, who are ignoring overpriced homes and waiting for prices to come down, according to multiple real estate agents.

Many sellers want to price their houses as if it were earlier this year, with interest rates at half the current level.

"People hire us as advisers to sell their biggest asset, their house, but often, they don't want to hear our advice," Sotheby's International real estate agent Robert Rutley said. "A lot of times, I ask people, 'What's your expected price,' and then I really show them the facts."

Early 2022 and all of 2021 were an unusual time in the real estate market, and while there is still growth, it's a lot less than it used to be. While "aspirational pricing" worked when mortgage rates were half what they are now, it no longer does.

"I always say, if it's not within 10% of the actual value, you're not going to get offers and people will wait for price reductions ... " Rutley said.

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Premeer Real Estate broker/owner Chris Whitten said a seller will often see a comparable house that sold in the spring for $500,000, and try to list for $530,000, and won't get any offers.

"We try to keep our sellers at bay and say yes, it did sell for that much, but this is a different market," Whitten.

Before the pandemic, everyone "played the cold game," Whitten said. Houses would be priced $20,000 higher than the true perceived value, a buyer would counter for $15,000 less, and the seller would walk away with $5,000 extra, and both the buyer and seller felt like they had won.

"It's no longer like that," Whitten said. "You've just got to price it where it needs to be to find the fair market value, and that price will get you a little over asking."

Real estate agent Constance Stowers said she tries to tell her clients where to price for homes, but some are adamant about pricing higher.

"They say, 'This is what my house is worth' but at the end of the day, it's worth what someone pays for it," she said.

'Make your house perfect'

When mortgage rates were low, bidding wars were the norm, buyers consistently waived inspections and house prices were rising by double-digit increases month over month; it was an "extreme" seller's market, Rutley said.

Now that the market is cooling, it's still a seller's market but sellers need to put in more effort to make sure a home sells.

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"You need to make your house perfect," Rutley said. "People are buying houses that are priced correctly and turnkey."

Whitten said sellers need to get professional photos taken and make floor plans available.

"You've got to market that property," Whitten said. "You just have [fewer] buyers in the pool, so you have to make your house more attractive."

'Sell it ASAP'

Stowers said the peak of the market may be gone, but prices are still up 37% over the last two years. With mortgage rates doubling since January, and with supply low , now is still a great time to sell.

"Sell it ASAP," Stowers said. "Get it on the market."

For those concerned about where to move if they do sell their house, Whitten said now is the best time. In 2021 and 2020, those trying to buy a home with a contingency that they needed to also sell the one they were currently in, went to the bottom of the offer pile.

With fewer offers as the market calms, those offers are being accepted.

Bridge loans are available

One major concern for sellers is where to move after selling a house. Many buyers are willing to honor contingency clauses that allow sellers to line up their next home before vacating, a trend that started in 2021.

For some sellers looking to buy a bigger house or in a more expensive area, a bridge loan can be an effective way to get themselves into a new home, Stowers said.

Bridge loans are offered as a short-term solution to "bridge" the gap between buying a new house and selling an old one, according to JP Morgan Chase's website.

It allows a seller to access the equity of their house to secure the purchase of a new home, without having the cash in hand from the sale of their old house.

"They've got a couple of my clients out of sticky situations," Stowers said.

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Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.

This article originally appeared on The Providence Journal: What you need to know to sell your house in Rhode Island