When the Real Estate Market changes from a Sellers Market to a Buyers Market, it can be an anxious time for Sellers, as 'days on market' can become a lot longer and showings slower.
Sellers need to be both 'mentally prepared' and be willing to adopt a more aggressive approach to help them achieve a successful sale.
Here are some hints and tips to consider -:
1. Know the Market.
Review a Comparable Market Analysis with your Real Estate Agent. It is essential to know what comparable properties have been selling for.
You also need to know what is the current 'state' of your market and medium-term forecast. Is the market in your area balancing out or still weakening?
2. Should I sell now or should I wait for the market to improve?
Is waiting for the Market to improve an option for you? If you don't have to sell now it is probably better to wait.
If you have to sell within 30 to 45 days, then you may be looking at having to price your home more aggressively, which may be 5 to 10% below current comparables.
If the market is still moving down and is likely to move below your comfort level, it may be a good idea to have a backup plan in hand i.e. you may have to consider a Line of Credit, so talk to your Financial Institution to see if that is an option.
3. Is it still Ok to Buy before I sell?
No, it is not recommended to make an offer on your new home without having a confirmed sale on your existing property.
At the very least you should make your offer subject to the sale of your existing home.
4. Offer Incentives.
Firstly work out who will be your 'Target Market'. With the help of your Real Estate Agent, you can assess the most likely types of Buyer for your property. You can then figure out what is most likely to be important to them an offer appropriate incentives. EG a First Time Buyer might be interested in having their Closing Costs paid, including furniture, or new appliances. If the Buyer has children starting school, flexible closing dates may be important.
Bear in mind a $2,500 - $5,000 price reduction would only have a small impact on a Buyer Mortgage Payments per month, but $2,500 or $5,000 as an incentive would represent a significant cash saving now, which may appeal if a Buyer has some Home Improvement they want to make immediately, but couldn't otherwise afford it.
A Buyers interest is likely to be at its highest when a Property is new to the market. Pricing is therefore key. Sellers need to make sure their list price matches or just undercuts the competition.
Be aware that if the Market is still weakening this pricing strategy may not be enough. Make no mistake, Buyers will be looking for a deal and to 'hedge their bets'. If they are concerned the market may move lower they will likely be looking to pay less than recent comparable sales.
If you can't live with this strategy then don't list your Home, as you will be setting yourself up for disappointment.
Overpricing is the worst mistake you can make.
6. Consider the Strengths & Weaknesses of your Home before you list.
Work as a Team with your Real Estate Agent. Walk through the home together and between you assess the strengths and weaknesses of your Home as if you were a Buyer. This can sometimes be difficult, so wear your 'hard hat' and encourage your Realtor® to be honest!
This will then give you a clear action plan of what needs to be done and if you choose not to go ahead with any changes at the very least you will need to get quotes for the cost of these items, as you can be sure a Buyer will be including them in their negotiations!
7. Curb Appeal.
First impressions are important! Make sure you have pressure washed the entrance to your home, pathways, sidings, eavestroughs and cleaned windows.
In Summer, lawns weeded &mown, attractive pots on decks and at the front door and flower borders weeded.
In Winter, wherever possible make sure the driveway and paths are clear of snow.
Cracks on walls, steps, and pathways can also raise alarm bells with Buyers so consider having them fixed.
8. First Impressions and Staging.
Ideally, your home should be deep cleaned before you list, as it needs to shine.
Saying you'll have the carpets cleaned before closing just won't cut it and scuff marks on walls and baseboards are also a 'turn-off'.
Taking time to tidy drawers and cupboards is also worthwhile and makes them appear more spacious.
Failure to take care of these details can leave the Buyer with a sense that the home hasn't been properly taken care of.
Being mindful of lighting and household smells are also important. Curtains and blinds open, lights on and no scented candles, smoke smells or food odors.
You've all heard the expressions de-clutter and de-personalize. Buyers can get sidetracked if there are personal pictures and specific taste art around. They look to see if they know someone in the picture!
Beware of bold colors around your home. Consider appealing to a more mass-market with your decor.
If you're not confident with your staging abilities consider using a professional stager who can either ' 'tweak' things or offer a full furniture package.
It's essential to have a good flow in a room and don't block access to the windows with a view, Buyers want to see the view and not fight through furniture!
9. Should I get repairs done now?
Buyers are mostly looking for their home to be 'move in ready', so there is definitely a case for taken care of as many repairs as possible. That way you are in a better position to control the cost.
If you are not sure about the age of some of the larger tariff items in your home, such as the Roof, Windows, and Furnace, it may be worth having a Pre-Sale Home Inspection done.
You can then negotiate more effectively if a Buyer is being 'over-zealous' with their repair list and avoid unwelcome surprises.
As a minimum, make sure your furnace filters are changed, doors and windows lock and window blinds work.
One thing is sure if you don't do repairs you need to be prepared to negotiate on price!
10. If my home is listed for 30 days won't it look stale?
While in a Sellers Market yes it would, in a Buyers Market it is not as important, particularly if you are not in a rush to move.
11. What should I do if I have Renters?
You need to make a judgment call as to how well the Property will show and will the renter be flexible and agreeable to showings.
If the answer to that is no, then you need to consider incentives like paying for the Home to be cleaned professionally every couple of weeks, having the lawn mowed or monetary incentives such a reduced rent.
12. Showing times
Unless you have tenants, try not to restrict showing times as Buyers may only have a limited time to view and you may be missing out on a sale!
13. Make sure your home is Fully Marketed.
Huge numbers of Buyers start their search online. Make sure you have professional photography and consider a walkthrough video if appropriate.
Putting your home on MLS and doing an Open House will not be enough.
Your Agent needs to have a good social media presence, advertising to suit your target market and have a 'long -game' to keep the listing top of mind with Buyers and Agents.
14. Explore all options to keep negotiations going.
When you do receive an offer unless it is a super low consider the adage ' your first offer is your best offer'.
Try to keep negotiations going as long as possible before you walk away.
Don't just consider price, also consider more favorable terms such as allowing a longer closing or including furniture items they have shown an interest in.
Remember the longer you keep talks open the better chance you can have of reaching a deal. The goal should be to negotiate until the Buyer buys or walks away!
The idea of this blog post is not to discourage you just for you to be prepared!
Reality is that if you have had no showings for a month or 10 showings and no offer - you've got a problem. It's time to take a hard look at your Marketing, Price, and Presentation.
For those of you that are moving up in the market, there is some good news - you are selling in a Buyers Market and you are buying in a Buyers Market!