If you only read the headlines, it would appear that Vancouver’s real estate market is always skyrocketing out of reach or nearly drowning. There is no in between. This can result in a great amount of confusion for home owners when deciding to sell.
Accurate or not, many of us receive much of our information from news headlines. These headlines can amplify the direction of the market, applying further force towards whichever way things are going. If you are a seller, you are going to be impacted one way or another depending on what the public believes is happening.
However, the fact of the matter is that even when the market appears unfavourable to sellers, there are still many who are ready to purchase if they perceive value. Listing your home at the correct price is crucial to achieving a sale. Pricing to sell depends heavily on how the market is performing at the time a home is listed. Missing the mark may end up being a costly exercise.
Let’s look at an example illustrating the importance of aligning a home’s list price with the current market trend:
Romeo and Juliet were long time neighbours living in nearly identical homes. Nine months ago, Juliet decided that she was ready to fulfill her lifelong dream and move to Europe. Her real estate agent advised her that there was strong activity in the market and that she could sell for $1,000,000. Knowing her house was worth $750,000 just three years ago, she was amazed by this growth. She took her agent’s advice, and within two weeks she sold for $998,000.
Throughout the last six months, the market has cooled off for various reasons. The media are reporting that conditions haven’t been this poor for sellers in over seven years. After exchanging a few emails with Juliet about how amazing her life is, Romeo has decided he too would like to move to Europe. After consulting with his real estate agent, he has been advised that he should price his home at $920,000. Unhappy with this, he comes up with his own plan to list at $1,020,000.
A few weeks pass by and the home receives almost no interest. Romeo agrees to a price reduction but is only willing to drop to $999,000, keeping Juliet’s sale price in mind. Three frustrating months pass with few showings and poorly-attended open houses. Romeo is now willing to accept the market for what it is and re-lists his home at $925,000. Sadly, nothing comes of this as since the time of his original listing, the market has dropped further. Bitterly, he reduces once more to $899,000. Finally, an offer comes in and the buyer and Romeo settle on a sale price of $880,000.
This example is unfortunately common in a real estate market which favours buyers. The important thing to remember when values are trending downwards is that time may be your biggest enemy. Every month that passes by can result in a loss of value with sellers being hit twofold by the costs of holding the property and in their final sale price. Maximizing your value comes from consulting with a professional to ensure you understand where the market is. Pricing correctly from the get-go will create a quicker sale, achieving the best net result especially when the market is shifting down.
The silver lining of selling in a buyer’s market is that you’ll be buying under the same conditions. Owners who manage to sell are now in a position of advantage as they can purchase their next property at a discount compared to what it may have been previously priced at.
If you’re looking to understand your property value in todays market, let’s get in touch! You can email me anytime at adil@adilkhimani.com.
Thank you for reading,
Adil