We are currently in a sellers’ market in Vancouver, for 2015. Here are top 8 tips for those considering listing their homes.
1) Move quickly to catch the seller’s market – Sellers’ markets don’t last forever so move quickly and decisively to catch the window of opportunity to sell your property before it changes into a balanced market.
2) Don’t delay by over-prepping your home – The best strategy in a buyers’ market is to invest some time and money to beautify your home to make it more attractive than others on the market; however, the best strategy in a sellers market is to get your home into market as soon as possible before the sellers’ market turns into a balanced market. Remember, there is very little competition in a sellers’ market so your place doesn’t have to be perfect – just do quick updates and avoid delays so you don’t miss out.
3) Consider selling now, moving later – In a sellers’ market, you are in the position of power – so feel free to use that power. If you don’t know where you want to move yet, just make it a condition of your listing that buyers must complete the sales transaction quickly so you get your money sooner, but also require them to allow you to rent back on a month-to-month basis until you are ready to move. This is a perfectly acceptable condition in a sellers’ market. We recently sold a house in Kerrisdale where the seller’s did exactly this – they received full payment within 21 days and then rented back for several months while they looked for, renovated, and moved into a new home. They simply gave the new owner (buyer) one month notice when they were ready to move. In a more extreme example (which we don’t recommend) recently a Kitsilano seller offered his home for sale subject to him finding a new property within 2 weeks. Even after being informed of this condition, the realtor received 8 offers from people who agreed to essentially be held hostage for 2 weeks while the seller looked around with absolutely no guarantee that he would even sell his house if he didn’t find something he liked. People – this is a sign of an extreme sellers’ market.
4) Price your home strategically – Vancouver buyers are eager, but not gullible, so you have to be strategic to get the best price. There are actually two strategies in a seller’s market. The first is to price at, or slightly below, fair market value and let buyers get into a bidding war and push up the price in a matter of hours/days. The second is to price 3-4% above fair market value and wait for an offer to come in over a few weeks. You will get to the same price either way. For example, if your realtor says the fair market value is $1M, you can list it at either $999K and get immediate multiple offers that push it to $1.010M or you could list a little higher, say $1.029M, and you will still get offers around $1.010M but it will take longer and it may give you a sense of comfort knowing for sure that you didn’t leave any money on the table. Our team has helped sellers execute both of these strategies with great success.
5) First offer is often the best – We see this time and time again – a buyer comes forward in the first week with a great offer and the seller turns it down thinking he/she will get even better offers, but they don’t materialize. In fact, the sellers often never even get the same offer again. The reason the first offer is often the best is because there is a lot of excitement around brand new listings and buyers will often offer their top price to try and beat out the heavy competition.
6) Greed always backfires – Have you noticed that even in this seller’s market there are some houses that languish on the market. That’s because those sellers set their prices too high. Buyers know the market and they will not be duped into paying too much. Furthermore, once a high-priced house sits on the market for over a month, buyers are not interested anymore. Vancouver has to be the only place in the world where four weeks is considered a “stale listing”. Once the seller finally decides to reduce the price, it’s too late – the damage is done. Buyers say “there must be something wrong with that house because everything else is selling quickly and that place hasn’t sold yet”. At this point, you can’t even get fair market value anymore. It’s a type of crowd mentality – buyers want to buy properties that everybody else wants, and they don’t want homes that nobody else wants. I’ve seen beautiful houses come onto a seller’s market priced too high and then keep reducing their price and end up selling below fair market value simply because of this phenomena.
7) Capitalize on “new-listing hysteria” – When a new listing comes on the market in either the eastside or westside of Vancouver, there is a fairly predictable rhythm. In the first week there is a lot of hysteria as dozens, maybe even hundreds, of pent up buyers swarm the property. If the property is reasonably priced they will have a bidding war. If there are no offers by end of the first week then you know that your price is somewhere above fair market value and you will probably not get full asking price. In the second week, the remaining pent-up buyers will view the house. If you haven’t received any offers by the end of the second week, then you know you are definitely priced above fair market value. In the third week, the pent-up buyers are gone and will not return – they have now moved onto other properties – so your listing will move into a new phase where you will have a few viewings per week from new buyers coming onto the market. If you haven’t received any offers on your Vancouver home by the end of the fourth week, you are heading into dangerous “stale listing” territory. Again, Vancouver has to be the only city where a one-month listing is considered a “has been”. I cannot stress enough the importance of capitalizing on the swarm of buyers and hysteria that will come in the first two weeks of your new listing – be ready with a strategic price and be open to seriously looking at the first offers, which are usually the best.
8) Realtors help you maximize price and minimize risk – Realtors are not smarter than you. But they are trained in real estate law and they know how to generate and manage offers in a way that is strategic, legal, and will get you the highest price. You can be the smartest guy in the room, but if you don’t know the rules then you are at a disadvantage. Realtors know the protocol and how to use it to your advantage.
If you are thinking about listing your house, please feel free to contact us for free, no-obligation advice or a Vancouver Home Value Market Evaluation. Ranked in the top 10% of Vancouver realtors, our team has substantial experience working with owners. We can help you navigate your way around potential pitfalls, and work with you to create a strategy that will bring you the maximum exposure and highest price for your home. We have worked with sellers all over the west side and east side of Vancouver, from Kerrisdale, Point Grey, and Kitsilano to Main, Grandview, and Hastings to help them get the very best price for their property.
*Written by Annette Saliken, YourHomeTeam with Sutton Westcoast Realty – 2015