Heat waves this summer have slowed down open house foot traffic in some areas, according to a recent report. Summertime home sellers may need to get creative to beat the heat.
Pending home sales are down 5.6% from a year ago, the biggest decline in eight months, according to Redfin, a real estate brokerage firm. While prospective buyers might be waiting on potential Fed rate cuts to buy homes, as economic research lead Chen Zhao pointed out in the report, another reason for slowed demand is extreme heat in some parts of the country.
“When we get a heat wave and it’s paired with humidity, people tend to just stay indoors in the air conditioning,” said Kristin Sanchez, a Redfin Premier real estate agent in Nashville, Tennessee.
More from Personal Finance:
How to prevent hurricane damage on your home
People are moving out of cities with poor air quality
How climate change may impact your wallet
Open houses during the morning, virtual showings
Selling a home during summer with extreme heat will call for more flexibility from sellers, according to experts.
“I’ve been having pretty good luck with doing my open houses during the morning, before the heat of the day kicked in,” Sanchez said.
Sometimes window air conditioning units or ceiling fans are removed for design purposes or to make the space look more appealing, said Terry Mainord, owner and founder of Terry Mainord Design, a staging company in Brooklyn, New York.
If that’s the case, offer handheld fans or refreshments can help buyers stay cool, Mainord explained.
Virtual viewings and walk-throughs have also become a common resource for real estate agents since the pandemic, said Mainord, especially if the buyer is moving from another city or state.
Utilizing these tools can also help local buyers get a better sense of the property even if they aren’t willing to trek out in the heat.
“Virtual showings have become a tool in a broker’s tool kit for selling,” said Mainord.
Make sure the HVAC system is serviced
If you’re hoping to sell your home during the summer, make sure the heating, ventilation and air conditioning system in the house is working properly. Buyers touring your home in the heat are likely to notice effects of it not functioning well, like weak air flow, humidity, leaks or air that isn’t cold.
“We want to make sure that the HVAC systems or units are being serviced, that they’re being maintained properly, that they’re working properly,” said Sanchez.
While the status of the system may come up in a home inspection, “it’s better to just get in front of it and make sure the house feels comfortable and that buyers walking through the home can tell that things are working properly already,” she said.
But the cost to fix or replace a home’s HVAC system can be costly and vary significantly; the bill can be as low as $100 or as high as $3,000, depending on factors like the costs of certain parts, according to Angi, a home repair and contractor marketplace.
“HVAC systems can be vastly expensive,” said Ashton Lawrence, director and senior wealth advisor at Mariner Wealth Advisors in Greenville, South Carolina.
A homeowner looking to replace an HVAC system would need to do the due diligence of “putting pen to paper and crunching the numbers” to see which will bring the most benefits, whether that is “immediate tax impact and tax savings” or “increasing the market value of the actual home,” he said.
You might be able to qualify for the Energy Efficient Home Improvement Credit even if you’re planning to tell the home at some point, for example, said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo, LLC in Orlando, Florida. The tax credit applies to certain heating, cooling and water heating equipment types. Make sure to look into what state or local incentives you may qualify for.
Make sure to keep documentation that can showcase all the home improvements, installations, costs and the dates. Those can help you increase your home’s “basis” when figuring out the profits from your sale and any capital gains tax incurred.
