Peggy Chirico ~ Hartford & Tolland County Real Estate Blog

Should I put my home on the market now or should I wait until spring?

I am often asked this question by sellers who think it would be better to wait until spring to sell their homes.

Of course, here in Connecticut, they have valid concerns about putting their home on the market in the winter.  The main concern that people have is that their home won't show as well in the winter as it will in the spring.  This is true, unless you are using the snow to hide your home's imperfections.

They are also concerned that there aren't as many buyers in the winter as there are in the spring.  This is true as well.  However the buyers who are looking now tend to be more serious about buying a house.  Why else would people go out in the cold freezing weather if they didn't have to?  They need to find a house.  January is also a major time for job relocation, so they will be out trying to find their new home.

And finally, homeowners are concerned that the spring market is simply better--more inventory, more buyers, more homes sold.  This is also true.  The spring market is a very active time here in Connecticut, but that can also have a downside.  Because more people wait until spring, there is a lot of competition.  Because buyers have a lot of inventory to choose from, their decisions are harder, and they may look at many more houses before they feel comfortable making a decision.  And not all buyers really want to buy.  Some just want to look, test the waters, get new ideas for their homes, etc.  Open houses in the spring are usually well-attended for these very reasons.

So should you put your home on the market now or should you wait until spring? Only you can decide whether you should put your home on the market now or wait until spring.  But if you do decide that you want to list your home, you can have an advantage by listing it in the winter.  There are fewer buyers, but they are more serious buyers.  There is also less competition, so if your home is priced well, it may be the most attractive option out there for the serious buyers.

If you decide to put your home on the market now, make sure that you do everything possible to compensate for the negative impact of the weather.  With icicles dripping from the roof and snow covering the roof, landscaping, driveway, and sidewalks, it is harder for people to really see all that your home has to offer.  But there are things you can do to show your home off to its best advantage.

Ways to Show Off Your Home in the Winter

• Make sure that the driveway and sidewalks are well-shoveled; turn on all outdoor lighting early if you have a late afternoon showing.
• Provide an extra mat for people to wipe their boots, and make sure the entry way is welcoming.
• Keep your home well-lit, clean, warm, and free of clutter so it will seem like a respite from the cold.
• Show off the fireplace if you have one.  If you don't want to light a fire, you can use battery-operated candles to cast a nice glow.  If you have a gas fireplace, turn it on.
• Find a room freshener that smells like apple pie. 
• Add a new throw, a coffee cup, and some books to a reading nook so people can picture themselves curling up to read.
• Post pictures of your beautiful gardens and landscaping as they appear in the spring.  Also have information on all the exterior aspects that they can't see, such as when your new driveway was installed, when you replaced your roof and your central air conditioning system, etc.
• Considering offering a home warranty so the new buyers will have more confidence with those elements that they can't see or test.

What are seller closing costs?

One of the topics that sellers need to be aware of when they put their home on the market is a realistic expectation of net proceeds. 

Most sellers focus on the commission as the largest closing cost that they have to deal with, but they are often caught unaware about another large cost to them at closing:  conveyance taxes.  In Connecticut, sellers are responsible for paying the tax when a property is transferred.   There are actually two conveyance taxes--one to the municipality and one to the state.

How are conveyance taxes calculated?

The state portion is a uniform tax of .005 (1/2%) of the purchase price up to $800,000.  For properties over $800,000, the tax is 1/2% for the first $800,000 and 1% for anything over $800,000.  So on a home sold for $300,000, the conveyance tax to the state is $1500.  A home that sells for $900,000 would pay 1/2% on $800,000 ($4000) plus 1% on the remaining $100,000 ($1000) for a total of $5000.  Commercial properties, including non-owner-occupied investment properties, pay 1% regardless of the purchase price. 

The municipal portion of the conveyance tax is calculated for most towns at the rate of .0025.  So the $300,000 home would pay $750 and the $900,000 home would pay $2250 to the town each is located in.  There are however 18 "targeted investment communities" in Connecticut that have the option of imposing an additional .0025 on property transfers (for a total of up to .005).  These towns are Bloomfield, Bridgeport, Bristol, East Hartford, Groton, Hamden, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Southington, Stamford, Waterbury, and Windham.

In 2010, legislation was enacted that would bring the municipal tax rate back to .0011 (.0025 was to be a temporary hike that lasted longer than expected).  So as of July 1, 2011, municipal rates will be .0011 for all towns except the 18 mentioned above, which have the option of adding up to .0025 to their rates, bringing the maximum to .0036. 

Are There Exceptions?

There are exemptions to the conveyance tax, including transfer between spouses, property transfers under $2000, certain resales by relocation companies, and transfers to certain non-profit organizations.  In 2010, Connecticut enacted legislation that would exempt from conveyance taxes sales that were deeds in lieu of foreclosure or short sales where the sales price was less than what was owed on mortgages and liens.

For an interesting look at the history of conveyance taxes in Connecticut and a comparison of tax rates of other states, see OLR Backgrounder.