Pricing Your Home To Sell

So you’ve decided to sell your home, condo or perhaps it’s a vacant lot.  As per my prior post, the #1 reason that properties sell or fail to attract a buyer is PRICE.  Sure, we can debate the matter location, condition and the desirability of the neighbourhood etc. but at the end of the day these are all factors relative to price.

  No matter how well maintained and up-to-date your home is or the fact it is in a great location, price is ultimately the most significant factor in securing a Buyer.  Today’s Buyers are forever fearful of over-paying.  Further, the Internet has enabled Buyers and Sellers to become very knowledgeable and informed.  Via their online searching and comparative shopping, they get a good sense of values. They know which properties have been listed for an extended periods of time and they determine by looking at photos and virtual tours which ones are physically worth going to view. 

 I would hazard to guess that when most Sellers decide to sell and contact a REALTOR®, the scenario unfolds like this.  The REALTOR® arrives at the property with little if any information to review with Mr. and Mrs. Seller other than perhaps a couple of MLS® data sheets for some other sales in the area.  They take a tour of the home with the Sellers then sit down to discuss price.  The REALTOR® will have a price in mind that they have arrived at based on the comparable MLS® sales they may have printed off in conjunction with their just completed tour.  Mr. and Mrs. Seller will also have a price in mind.  The Seller’s price will be based on the following:

• What they paid for the property plus any money they have since put into it.
• What they feel the home would cost to replace if you were to build it today.
• What they need to get out of the home in order to move on to the next home they wish to purchase.
• What their neighbours have told them their property is worth.  This price is usually high as the neighbour is selfishly protecting their own interests and  the perceived value or their property.

  The fact is, none of the above matters and is of little consequence to a Buyer(s).  The property is ultimately worth what a willing Buyer is prepared to pay.  For the most part, the most they are willing to pay is an amount equivalent to what other comparable homes in the area have sold for.  The REALTORS® job is to analyze the market, look at what has sold, what hasn't and also take a look at what is currently listed for sale as that is what the Seller(s) will be competing with.

  In order to effectively do the necessary legwork to establish price, as a Market Value Appraiser I prefer the two stage listing approach.  The first visit is to gather information about the subject property which can then be used to compare it to other recent sales in the area.  Differences in lot size, location, the size of the house, number of bathrooms, features, finishes and other criteria all need to be reviewed, with dollar adjustments made for the many differences that are bound to exist.  Only then can you arrive at a realistic selling and listing price.  In some instances and this is especially true with higher end homes, they may be no good comparables.  Nonetheless, conclusions can and still be drawn in order to arrive at a realistic price that will resonate with Buyers.  This entire process takes some research and skill.  It’s not a matter of pulling a number out the air so-to-speak or simply listing it for what the Sellers want.  Doing so will probably result in the property being listed for an inordinately long length of time coupled with the need for multiple price reductions in order to secure a sale.  When this scenario unfolds, the property may in all likelihood, sell for less money than it would have if priced correctly at the start.

  If you are interviewing a REALTOR® with the intent of listing your property for sale, the onus is on the REALTOR® to provide you with the following information:

• A summary of other properties in the area that have sold?
• How do they compare to yours in terms of location, size, condition & features etc?       
•  How long did it take for these properties to sell?
•  What was the listing versus sale prices for these properties?
•  What other area properties are currently for sale that you will be competing  with?

  There are other questions to ask as well but I think you get my point.  Selling your property is more than having a REALTOR® walk through and throwing out a price with nothing to substantiate it.  Doing so will inevitably result in an unduly lengthy days on market, the need for multiple price increases and in the end, a sale price lower than what you mind have attained early on had the property been priced so as to be in the market versus just on the market.

  Pricing a luxury or higher-end home is often a much different matter than what I have described above.  Finding a comparable sale(s) to a $1 or $2 million plus property can be a challenge. If you are the owner(s) of a luxury, high end property I will in the next post on my luxury home blog  “Southern Georgian Bay CarriageTrade Homes” talk about the process used to arrive at an appropriate price for that distinctive one-of-a-kind property.

One closing comment.  Everyday I see REALTOR® ads offering "FREE Home Evaluations."  With about 100,000 REALTORS® in Canada there are tens of thousands of "FREE Home Evaluations" being offered.  As a seller, insist on obtaining one that is done thoroughly and professionally utilizing some of the guidelines I have explained above.

  

Why Is My Home Not Selling?

We are now almost one and a half months into the new year.  Despite the relentlessly cold weather we have been having, spring will indeed come and with it, an upturn in the real estate market as traditionally happens once the better weather arrives.  

  As previously reported, 2013 was the best year in six years in terms of the number of properties sold through our local MLS® system.  Further, it was also a “record” year in terms of dollars sold with almost $625 million in properties changing hands via MLS® sales in our market area.  With all this positive news, some sellers are probably asking themselves; “Why is my house (or condo) not selling?”  

  Earlier this week I completed an update course in order to renew my MVA (Market Value Appraiser) designation.  This designation must be renewed every two years and it requires taking some additional courses relative to appraisal in order to do so.  The course I completed was titled “Pricing to Sell” and it reinforced some of the various appraisal methods and steps taken in order to accurately value a property.  As I worked my way through the materials it really struck me that a large percentage of REALTORS® are not aware of and or do not follow the necessary steps to establish accurate property valuations.   

  The #1 reason that properties do not sell is PRICE. I know this may seem like I am over simplifying things but let’s look at the follow scenarios:

1 - The home make simply be just over priced.

2 - The home may be priced too high for the neighbourhood.  Having the most    

      expensive home in the area is not a good thing.

3 - The house may be dated and in need of renovation and upgrades.

4 - The house may be situated in an area that for some reason has become 

      undesirable ie: increased traffic or it has been re-zoned so as to allow 

      commercial uses etc.

5 - Market conditions have changed, perhaps interest rates have gone up or the 

      economy has slowed down.

  Every one of these five reasons is in some way tied to price.  The first two are obvious, but what about the other?  If a home is dated and in need of some renovations, the price needs to reflect that.  It needs to be priced in such a way that if the buyer is in fact interested in the property, they will want to purchase it at a price that will allow them to undertake and finance the required.  Some buyers may just simply not want to get into a "project" and there is little you can do about that.  

  As for items #4 and #5, if a home is situated in an area where the land use and zoning have changed or say a new highway went in, you may need to price it lower in order to attract a buyer.  If the economy has slowed or interest rates have increased etc. then again the price may have to be adjusted to account for those factors again in order to attract a buyer.  One way or another all of these reasons tie back to the issue of price.

 At the end of the day, maybe you made a bad choice in the REALTOR®  you selected to list and market your property.  That too may relate back to price.  Did they prepare a comprehensive evaluation which they reviewed with you to arrive at the current market value of your home?  Many times they don't instead just throwing out a price at which to list the property without doing any research or worse, they listed it at a price dictated by the seller.

 As we approach spring and head into the prime selling season, I am going to spend some time talking about price as it is the most crucial component in getting your home or other property SOLD!  In my next post I will review several ways in which a property evaluation can be prepared in order to arrive at a realistic market price.  There is a difference between having your property "on the market" versus "in the market" and my desire is to show you how you arrive at the latter.  Stay tuned.....

Weather Impacting Area Real Estate Sales

  Weather seems to be a great topic of conversation these days and while those who despise the winter are loathing it, winter sports enthusiasts are having the best winter in years.  Our local economy is also a huge benefactor with the grocery stores, restaurants and other area retailers doing a brisk business especially on the weekends.  Real estate activity on the other side was down significantly in January, primarily due to the cold snowy weather,  Between the extremely cold weather, heavy snow squall activity and frequent road closures, overall showing activity for properties listed for sale were down sharply during the month. Property showings are the prelude to getting an offer and without them, sellers need to be patient.

 Area real estate sales in January as reported through the MLS® system of the Southern Georgian Bay Association of REALTORS® were down 27% in terms of the number of properties sold.  Sales volume in January of $26.3 million was down $10 million or 28% from January 2013.  Sales in every municipality reflected a decrease in sales from last year.  Similarly, every price range also showed fewer sales compared to one year ago. 

 

  New listings year-to-date which total 490 properties represents a 14% reduction in the number of properties listed for sale in January 2013.  Expired listings this year are also down as some sellers having failed to attract a buyer have taken their properties off the market.  This has lead to as was predicted, a more balanced market which benefits neither sellers nor buyers unduly.  The attached graph illustrates how market activity in terms of sales and listings have been moving over the past three years as sales have increased while inventory has been reduced.  

 

One month does not represent a trend and understandably, who wants to be out looking at properties when it’s -20 degrees?  At the same time, recent Open Houses I have held have been attracting good attendance indicating the demand and interest in area properties is still very much there.  With more moderate weather during the month of February, we can expect to see an increase is sales activity which is typical as we head into the Spring market.

  

Gorgeous Post & Beam Bungalow at Trail Woods in Thornbury

I have been blogging on this site since late 2008 and typically I don’t use it to promote my listings or myself for that matter.  Rather, I view this forum as a way to share meaningful information to my readers that will assist you with your particular real estate goals and from time to time I will also comment on some community activities as they too, affect your real estate decisions.  There are always exceptions and in this post I want to highlight one of my current listings as it represents excellent value in today’s market and is great opportunity for s savvy Buyer.  

  On the western edge of Thornbury is a relatively new subdivision that our Brokerage Royal LePAGE Locations North is representing.  Trail Woods offers 137 fully serviced lots, all of which are a short walk or bike away from the quaint downtown of Thornbury.  It’s close to all area ski clubs and is situated between the Lora Bay Golf Club to the west and the Georgian Bay Club to the east.

  If you are looking for a large bungalow with excellent finishes and features, 169 High Bluff Lane could be for you.  Built in 2008 and situated on a generous 72 foot at 186 foot lot, this lovely home features a spectacular great room with an impressive post and beam ceiling, beautiful hardwood floors and a floor-to-ceiling stone fireplace with a gas insert.  The spacious kitchen features quality cabinetry, granite counters, a huge centre island great for entertaining and Jenn Aire stainless steel appliances.  The large master suite offers good separation from the other bedrooms and features two walk-in closets, a huge five piece ensuite bath.  Two additional bedrooms one with its own three piece ensuite bath and a laundry area complete the main floor.

  The lower level is substantially finished with two bedrooms, a possible 6^th bedroom or office, a large rec room or games area plus additional space for a workshop or hobby area etc.  This home features forced air gas heat, air conditioning, and in-floor heating on the lower level fed by on-demand hot water heating.

  With 4,100 square feet of finished space and a list price of $684,900, this home is very attractively priced to attract a buyer and offers excellent value in our market.  Click here to see the details for yourself or call me to arrange your personal tour of this beautiful home. MLS® 20136408