Truth: Toronto’s real estate market has shifted. There are a lot more houses for sale than usual, and Buyers are nervous.
Even More True: Gone are the days when ‘the house will sell itself’. Crappy cell phone photos, just an MLS listing and a messy unstaged house just don’t cut it anymore.
It’s time to be deliberate about doing the things that are going to get you the most money and help you sell quickly. Buyers have their pick of houses and making yours stand out needs to be your (and your agent’s) #1 job. Here’s our best advice:
You Need to Obsess About the Details
- House prep and staging: Don’t underestimate the benefits of decluttering, depersonalizing, deep cleaning and professional staging. There are plenty of studies that show that staged home sell faster and for more money. A 2015 National Association of Realtors report concluded that staged homes sell 87% faster. With lots of properties to choose from, Buyers need to fall in love with your home – and that connection is something you can influence. If you’re already listed for sale, talk to your agent about staging your home. If you’re thinking of selling? Hire an agent who can guide you on how to prepare your home for sale while balancing the timing and seasonality of the market. Better yet: hire an agent who takes care of all the details for you. [Related for people not already working with an agent: Selling with BREL]
- Incredible photography and video are critical to attracting Buyers where they’ll first see your home: online. According to Redfin, HDR photography adds an average of $3,400 to the sale price of a home. The best deals we’ve found for Buyers over the years have inevitably all been homes that either didn’t have photos or had terrible ones. Good for the Buyer, bad for the Seller.
- Marketing: These days, your agent needs to go well beyond listing your home on the MLS. What’s the marketing plan? Is the marketing plan designed to sell your home or is it a veiled attempt to help the agent find more clients? Who is your target Buyer? Where are they searching for a home? Your agent should be able to give you the statistics of how many people are seeing your home realtor.ca and on their website. [Related for people not already working with an agent: How the BREL team Markets Your Home]
A Word About Showings
The number of showings you can expect has gone down significantly in the past few weeks – arguably 50% or more depending on your neighbourhood. Here’s why:
In March, there may have been 5 homes like yours on the market, so every Buyer looking to buy in your neighbourhood clamoured to see everything that was available, even if it didn’t fit their criteria. Desperate times called for desperate measures, and the Buyer who wanted a 3-bed 2-bath house with parking was visiting 2-bed houses, 1-bath houses and houses with no parking. They didn’t often make offers on those houses – but it kept them busy and feeling like they were progressing in their house search.
Today, there may be 10 or 15 homes like yours for sale. Buyers don’t need to make the same kinds of compromises they did just a few short months ago, so they are going to be selective about the homes they are looking at. This is good news! The Buyers booking showings these days are more serious and motivated. You don’t need 80 curious people parading through your house in one weekend in order to sell it. I’d take 5 motivated Buyers over 50 looky-loos anytime.
Also remember: real estate is seasonal and it’s completely normal for showings and sales to decrease in the summer – it happens every year. Part of the slowdown in activity that we’re seeing right now is normal. It’s also normal for things to pick up and get busier in September.
It’s Going to Take Some Time
I know, it was fun when properties sold in 6 days, but that just isn’t happening very often anymore…and that’s OK. It’s how the rest of the world has been operating forever, and it doesn’t mean your home won’t sell.
The shifts in the market are too new to know what the ‘new normal’ is, though it’s possible that it will take 30 days or longer to sell your home. As long as people are continuing to see your home online, you’re getting showings and your agent is keeping you informed about what’s happening, you’re on the right track. Be patient.
And remember: Putting a higher-than-market value price on your home doesn’t mean it’s going to sell for more money – it just means it’s going to take longer to sell as you repeatedly lower the price down to market value (which in this market, might be declining over time). If you’re looking to sell fast, then price it according to what’s happening in the market right now.
If You Get an Offer
Know who your Buyer is and their capacity to close. Accepting a great offer is almost irrelevant if the Buyer isn’t able to get financing and take possession of the property. We’ve mostly seen this with Buyers who bought at the height of the market in February or March and were unable to sell their old home when the market shifted (or were unable to sell their home for enough money to fund their new purchase). When you get an offer, it’s important that your agent finds out about the Buyer’s ability to close. How much is their downpayment? Who is financing the mortgage? Do they need to sell their existing property to fund the purchase of your home? If so, where’s that home and what’s the plan for listing it for sale? How much do they think it’s worth? Do they have a plan B in place if the property doesn’t appraise out for the amount they paid? Don’t underestimate the power of a Google or Facebook search to find out who the Buyer is. [Related: All About Appraisals]
Get a big deposit. When a Buyer makes an offer to purchase a property, they also provide a deposit (usually held in trust by the listing brokerage). How big is their deposit? Bigger deposits are always better as they ensure the Buyer has some skin in the game. It’s easy to walk away from $1,000….but would you walk away from $50K? [Related: All About Deposits]
Be ready for conditions When a Buyer isn’t competing for a property in a bidding war, we usually expect them to make a conditional offer, meaning that their offer is conditional on things like getting financing or a home inspection (usually for 3-5 days, though longer conditions happen sometimes). If the Buyer doesn’t waive the conditions, they are able to walk away from their offer and their deposit is returned. Conditions can be frustrating for Sellers because it prolongs the process – but really, it’s win/win. It’s better to find out 2 days after an offer that the Buyer can’t get financing instead of 2 days before closing.
Remember that negotiating is a two-way street. Focus on what’s most important to you (price vs. closing date vs. conditions) and be prepared to be flexible on some terms. Most importantly: hire an agent who isn’t afraid to negotiate smartly.
You might have to be flexible on price. It may be better to sell at the start of a declining market than ride the market down.
Already on the market? Talk to your agent about how to adapt to the new market realities. Thinking of selling? Give us a call.