Prudential Sussex Realty's Sunshine Coast manager, Alan Stewart, wrote this article. Its reprinted here with his permission.
Frustration is often the end result of folks trying to sell their home in a down market. A lack of showings and even more importantly a lack of offers can drive sellers to the brink… especially if they are on a timeline.
I had a past client approach me the other day asking “Hey Al! How am I ever going to sell my friggin’ house?” The expletive was a clear indication that his emotional attachment to the place was at an all time low.
“Well, how bad do you want to go?” I asked.
“Bad.” he responded, “I’m starting my new job in less than 4 weeks and if I don’t get my place sold I’m going to have to leave the family here, rent a place in town, and commute back and forth on the weekends.” He was obviously distressed with the idea of the added cost and frustration of an already challenging process.
“Have you had a conversation about it with your REALTOR?”
“Not yet. I don’t want them to think I’m desperate. I need to get as much as I can for the place, especially when I look at real estate prices in Vancouver.”
“I think we better get a coffee.” I said.
The real estate market ‘is what it is’ and unfortunately there isn’t a whole lot of things individuals can do to affect it (except, that is, for individuals which happen to own large media corporations or financial institutions). You can, however, affect the perception of value that buyers attach to your home and therefore affect the likelihood of it selling sooner and for more money in a few simple steps.
First, have a frank and open conversation with your REALTOR about your situation. You REALTOR should be a trusted advisor and councillor and unless they truly understand your situation, it’s hard for them to help. If you really need to sell, you need to express your motivation to your REALTOR. While your motivation doesn’t affect the market value of your property, understanding your needs can better help your REALTOR make suggestions to price your property appropriately.
I’ve used the analogy of fishing in the past. If you put a big hook at the end of your line there is a chance you’ll land the big one and maybe sell your home for more than the market would suggest it is worth, however, that big hook will discourage smaller fish from nibbling. In this market, you need all the nibbles you can get - so if you’re motivated to sell, price your home in a way that will attract as much attention as possible.
According the Real Estate Board of Greater Vancouver, the percentage of original listing prices received at final sale on the Sunshine Coast continues to fall. That is to say that while in 2006 home sellers were fetching 95 – 98% of their original asking price, sellers today are more likely to receive less than 90% of their original asking price. The lesson: price it right in the first place to avoid the pain of a lengthy sale process and the frustration of “low ball” offers.
As part of your pricing decision, factor in all the cost of NOT getting your house sold. If you’re making a move, factor in the market you are moving to. With housing prices continuing to rise in certain areas of Vancouver, the cost of waiting can be significant. The average sale price in North Vancouver in January 2012 has risen over $40,000 since January of 2011. The average price of a West Vancouver home has increase over $300,000 during the same time! Would you have been able to sell your home a year ago and moved on with your life if you had dropped the asking price by a similar amount? Likely.
The second most important thing to do, in my opinion, is to have your house present itself in its best possible light. Even though the weather makes it a challenge to make your yard look spring time fresh, it’s imperative that peeling paint is corrected, that the old rotten dog house is removed and that the stepping stones to the house are clean and not submerged beneath the a half inch of inky black soil.
While it’s no doubt a challenge to keep the house looking it’s best between showings that occur every other month, you have to remember that people are driving by and evaluating your property when you least expect it. You know you’ve seen the cars driving slowly past… that could be your buyer!
Last year there were 449 home sales on the MLS on the Sunshine Coast and over the course of the year 1187 homes were listed for sale (not including those that were on the market from 2010!). Based on those numbers and the expectation of a similar market this year compared to last, home sellers have about a 37% chance of selling. While these are pretty good odds if your playing the lottery, I wouldn’t feel so comfortable risking my most valuable possession or playing Russian roulette!
So, if you’re truly motivated to sell, price your house appropriately. A wise man once told me that to sell in a declining market you have to get your price just BELOW today’s market level. “It’s like catching a fly-ball. You wouldn’t expect to catch the ball by swiping at it on the way by. You position yourself below it to give yourself the best chance at making the catch.”
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