Monthly Archives: October 2014

What Does a Buyers’ Market Mean for Sellers?

house for sale

In the last few months, I have received numerous calls from Sellers who are in a panic. They have their home listed and they have not received a single offer on their home. In some cases, the home has only been listed for a few weeks! However, there have been cases where the home has been listed for a number of months. The pendulum of the real estate market has certainly swung in the opposite direction, and rather quickly!! So what exactly does a Buyer’s market mean for Sellers?

Gone are days when sellers could do nothing in the terms of getting their homes ready for sale, ask top dollar and still sell a dated home in a bidding war over the weekend. Am I saying this will never happen, of course not! However, that is now a rare exception and no longer the norm. There is simply more available inventory for Buyers. This means Buyers can take their time making a decision and be more selective. From what we’ve seen over the last few months, they have certainly become much more selective!

Now Buyers are paying close attention to all the details and imperfections and “potential” problems. If they don’t like what they see it will cause them to walk out the door and they’ll be off to the next house. In the past, even if they saw the “issues”, they were willing to overlook them because there was so little else to choose from. Now, there is substantially more inventory so they have the luxury of time to look and see what else is available without the panic of the bidding war or the offers date.

We do still see homes with offers dates. They will typically be homes that are priced very aggressively and are hoping to attract multiple bidders. However, this strategy has backfired a number of times and resulted in no offers, or only one offer at well below what the home owner was hoping to receive. This can become very risky. If you list low, then receive no offers, it’s next to impossible to up the price to what you really want. Yet, we have seen this happen. Most Buyers that may have been interested and were waiting to see if there was a bidding war, will simply walk away once you raise the price. If they were marginally interested in the lower price, the chances of them being interested in a higher price are really not great!

So the number one rule, is that pricing your home fairly and properly for its age condition and location becomes critical in the success of the sale. Even if you overspent on your home when purchasing, gambled in a bidding war, or over-improved it with the hopes of better returns in a market that was seeing double digit market increases for years, you may have to make some tough choices, if you really need to sell it now. Depending on your circumstances, it may be better to wait things out a few years until you can get your money back. Or if you are not in that position, it may be best to minimize your losses, take what you can get and move on as quickly as possible. What may have been realistic and expected a few years or even months ago is no longer realistic. The rules have changed! Just like buyers struggled for years, so now must sellers take their turn as the pendulum swings in the opposite direction. Just because a neighbors’ home sold 2 years ago for an outrageous amount, that doesn’t mean you will get the same price. Don’t expect it and blame the Realtors because they are telling you, your home’s evaluation is below what you hoped or expected. Isn’t it better to work with someone who will be honest with you up front? There are some who will promise you the unrealistic list price you want, then once they have the listing, continually drop the price by tens of thousands of dollars until it is sold. This is not in your favour! It’s nothing more than a strategy to secure a listing.

I recommend, you discuss the top asking price and the lowest asking price you are comfortable with before you list. Nothing bugs me more than someone who promises a ridiculously high price, knowing it’s over-priced, just to get the listing. Then they proceed to drop the price $40,000, $50,000, $60,000 or more, until it’s sold. This is not sales, its trapping someone into a contract and seriously under delivering in service, just to get a commission. Rather than dropping the price repeatedly, consider staging. We could do a real top notch stage job for well under $5000 in most cases, so why drop the price $10,000 or $20,000 before looking at all the other options?

When your Realtor asks for a price drop, they often recommend this based on the feedback of other Realtors and their clients. However, if they have dropped the price substantially and repeatedly on you, it may be better to withdraw the listing and once the waiting period has expired, look for a new Realtor. Depending on the price of your home, a drop of 5-10% may be quite reasonable. However, a price drop of $60,000 on a $250,000 property is not! It simply wasn’t priced right to begin with!

Pricing will be the first key factor to get people’s interest. So make sure you are priced fairly. If your Realtor recommends $299,900 and you want $310,000 to pay for the Real Estate Commissions – you have just eliminated all the buyers who were looking at $300,000 and down. It also means your home will now be competing with the other homes in the 300,000 – 350,000 price range which may be nicer than yours, bigger, or have some other important features that justify the additional price. When buyers compare your home to these, it will come up lacking because it’s in the wrong price range for comparable properties. However, if you’re Realtor suggests $299,900 it’s because your home is in the top of its comparable price bracket. This means your home will look more desirable than others in the price range. It will have more features, square footage or a better layout that buyers are willing to pay more for than the other homes. Chances are it will sell faster and closer to the price you are asking. So don’t out price yourself, or you may not be selling your home anytime soon.

There are many things sellers can do to get their homes sold, quickly and at a fair market price! Take the time to get your home ready for sale. Cleaning, de-cluttering and basic repairs and maintenance may have been able to be overlooked in the past, but no longer! If every other home you are competing against has made the effort and yours is only minimal effort (or none at all) – it will show and buyers will move onto the next home! These will continue to be discussed over the next few weeks as now more than ever, it takes 2 things to sell a property – the condition and the price!  

A Little Bit of Everything….Happy Thanksgiving Everyone!!

fireplace3 front door pumpkin terene

Ever find yourself on what I called “perma-hold?”  That’s when you’re waiting on hold for a customer service rep (or just some live person) to speak to you while music plays on and on and on…. Anyone else have issues with perma-hold!?!  If a company can take my money – they should have a person there to speak to me within a reasonable amount of time! Ok – done with my rant J However, as with any Professional Multi-tasker, I’m planning Thanksgiving Dinner, writing a blog and thinking about the links for the upcoming week as I’m waiting on hold, so thought I should just write it! Nothing like making good use of “on-hold” time! Thank goodness for speaker phone!

So this week we started the complete office re-design for Royal Le Page Prime. It’s so exciting! As always I can see the finished project in my head and cannot wait for it to unfold with the new paint, flooring and the furniture so everyone else can envision what I see! Just a few more weeks now for phase 1! Although everything was well planned far in advance there are always last minute details that require attention at the start of a project. It’s all part of the excitement and attention to detail that is required for it to all come together beautifully to everyone’s satisfaction! I’ll definitely be posting pictures once the first phase is complete!

The holidays have sure gotten here quickly!  Fall is one of my favourite times of the year! I just love the different colors outdoors and cool crisp air. We can enjoy our sweaters and heavier clothes without the sloppy mess of snow. Don’t get me wrong I love winter too – but this is just a beautiful time of the year to work. It’s not too hot. It’s not too cold. There’s no sloppy slush or mess outside. The drive back home is amazing as the colors change every day!! It’s perfect weather for a nice walk outside! Besides – It’s just so much fun to decorate with fall colors inside and out!

My front door usually has a collection of large friendly spiders; a scarecrow; a goofy witch and pumpkins! Inside I have everything from decorative pumpkins, gourds, and fall leaves to beautiful autumn colored candles in scents of apple cider; spiced pumpkin; pumpkin pie, and autumn glow, etc. You rarely walk into my home without some tantalizing fall smells assailing your senses!  I really do have fun with this time of the year. My cottage is no different, just scaled down a bit but same décor and same wonderful smells wafting through the home, only those are mixed with more baking smells – nothing like fresh baking at the cottage. Sorry weight watchers – I will just have to indulge for one day this weekend!

My favorite space this year is my new collection of Autumn décor from Pier 1 on my new rustic fireplace. Back in January we bought a new mantle for our living room fireplace. It’s a very beautiful and rustic slab of a red cedar tree. My Dad expertly refinished it and sealed it and we recently mounted it above our old fireplace. I have just ordered a new mirror for above but have a small one there for now. The rough bark is still on the edge and it just looks stunning!! I’ve been redecorating my own home in stages and am slowly getting my living room and library/piano room to near completion. My family just loves the new space and it works so much better for us as a family!

While I’m cooking up a storm and baking pumpkin pie (and of course, apple pie for my little girl – her favourite food!) this coming weekend, just wanted to reach out and wish everyone a very Happy Thanksgiving! Thank you for sharing my blog and giving me your precious time. I do really appreciate everyone who takes the time to read and respond. Take some precious time with friends and family to enjoy the beautiful fall colors and perfect weather!

Happy Thanksgiving Everyone!

Designing for Re-Sale vs. Custom Design

AFTER BEFORE 

I work with a number of clients, investors, who build new homes for re-sale or gut and re-sell existing homes for resale. We help with materials selection and overall design plan and final staging. There is always one big difference between those that do well and sell quickly and those that struggle to get the price they want/need. Custom design should be left to spec homes not for re-sale homes that need to appeal to a broad number of buyers.

When I meet with a new client who are having difficulty selling their home, I often hear the words “we liked this – so we did it this way”. Unfortunately, selling a home quickly and for a good price is not about what you like. It’s about what buyers would like. Many people have a very hard time getting out of their own heads and getting into the head of the buyer. This is where your Real Estate Professional is critical long before it’s time to list your home. 

A good Real Estate Professional, familiar with the area, will be able to give you some key factors that you should be using to determine the renovation plan, budget and design of your project. Who is the target demographic most likely to look at purchasing this style of property? What is the best price range to shoot for that will generate the most traffic and result in a quick sale? What key factors are they looking for in a renovated home? Do you need to design for a family or empty nesters? The number of bedrooms and their size and accessibility are all key factors to drawing in the buyers. A main floor laundry or powder room may be nice in older homes, but when you remove a bedroom to accomplish this design, it removes a whole group of potential buyers who need the third bedroom and limits your buyer pool, which may mean it takes longer to sell the home. You need to know who you are designing for before you plan the design. A neighborhood with young families will not find a home with only one bedroom on the main level appealing if the families have young children, empty nesters may not mind it at all. Who you are designing for is as important as the proverbial “location, location” when it comes to selling the property.

Your color and material selection is equally as important. Dark colors make a space appear smaller. Dark walls visually bring the wall closer to the viewer. In a small space, lighter colors on the walls will make the space appear larger. White walls with white trim (or the same color on walls and trim regardless of shade) create no definition and look exactly like what it is – someone trying to save money on painting! Not the way to impress a buyer! Selecting bold bright colors because you “love” them can be a real turn off to many buyers; bright purple or green is not everyone’s favourite. Although more neutral tones may not be the color a buyer loves; few buyers will walk away from a home because of neutral paint tones. It’s all about appealing to as many buyers as possible, not appealing to 1 out of 100!

Lighting in a room plays a huge roll. If you have room without natural daylight, no overhead lighting and you paint it a dark color, it will appear dark and unwelcoming. If you have a space with an abundance of natural light and good overhead lighting and you choose a darker shade it will look completely different that the previous room just as a direct result of the lighting. Take this into consideration when designing the space.

Finally, material selection from flooring to tile to counters…just because you like the wild tiger stripe doesn’t mean most buyers will! The more pattern in your materials the “busier” and more overwhelming the room will appear. Too much for the eye to take in will overwhelm the buyer not impress them. One “busy pattern”, with the right complimentary colors and tones can look beautiful and classic. I’m referring to a bold material design not a standard variation in flooring or counters. I’ve seen some really wild design and very frustrated sellers that don’t understand why their homes are not selling.

Just because materials are on clearance and can be purchased at a low price, doesn’t mean they are a good buy. If it’s that old and doesn’t go with the rest of the home, you are doing yourself a disservice. For the few hundred dollars you may have saved, it may have cost you a lot more in terms of how long it takes you to sell the home. Save a few hundred here and hold the house for another 2 months – was it really worth it?

The most successful sellers are those who can take their personal preference and set them aside for their own personal homes. Plan your design to appeal to greatest number of potential buyers and you will sell quickly, successfully and be on to the next project before you know it!