by Todd Lewys
As most everyone knows, the mantra in real estate is, “location, location, location.”
In today’s increasingly balanced real estate market, that age-old saying is now being followed closely by another: “price, price, price.”
Or, to be more to the point, price your home realistically. With over 5,000 listings in September — 2,364 of those listings were new listings entered on MLS® during the course of the month — the average residential-detached home is taking 33 days to sell. And many of those homes are selling below list price.
“Given such a competitive market with supply presently outstripping demand, there were price adjustments happening for a number of MLS® listings,” reported WinnipegREALTORS®’ market analyst, Peter Squire.
That’s a fact, said REALTOR® Glen Williams. “Many of the deals I’ve done lately have involved price reductions. I asked my clients if they wanted to sell the home or risk it sitting on the market for weeks or months. Most elected to sell their home at a reduced price.”
Consequently, it’s clear that sellers need to listen to their REALTOR® more carefully when it comes time to determine what price their home needs to be listed at. REALTOR® Bobby Silman said it can be easier said than done to convince clients to price their home accordingly.
“I think the expectation level of many sellers is still on the high side,” he said. “They have realized that just because a home was worth a certain price six months or a year ago, it’s not necessarily worth that price now. Sellers have to be more understanding of market conditions.”
Unfortunately, that understanding doesn’t come automatically. That means it’s up to REALTORS® to put in as much time as is required to educate their clients.
“It’s up to us as REALTORS® to sit sellers down and educate them on the realities of today’s real estate market. That means doing research so that we can show them hard data — how their home compares in value to similar homes (comparables), average days on market (DOM) for homes like theirs, as well as other factors such as upgrades and location,” said Silman.
REALTOR® Jeff Brown said that sellers often take too much stock in upgrades done to their home.
“I try to explain to my clients, while it’s great that they spent a good chunk of money on putting in new hardwoods throughout the main floor, that might not matter to the people who are looking at buying their home — they might not see the value in the upgrades,” he said. “It’s not unusual for a seller’s opinion of the value of their home to be inflated, because they’ve put so much time, effort and money into upgrades. When you’re trying to sell a home in a balanced market, you have to price your home objectively. You can’t get emotional about it.”
Again, that’s easier said than done, said Silman.“As a REALTOR®, you have to try to take emotion out of it. One way to do that is to consult with people before they put their home on the market. Basically, the idea is to tell them not to go nuts on upgrades — just do what’s necessary. All you need to do is upgrade key areas with paint, new fixtures, flooring or carpeting — you don’t have to do a total makeover. When you haven’t spent so much on upgrading your home, it’s easier to price it more realistically.”
That’s the key, agreed Brown — to get emotions out of the way so sellers can focus on what it will take to sell their home in a month or less.
“Educating sellers is so important,” he said. “These days, you basically have to sell clients on the correct price. If your market research shows that similar homes in the area are selling for $300,000, then, as a REALTOR, it’s my job to convince them that their home will sell at that price. The trick is to do that straight away so the home sells as quickly as possible and doesn’t sit on the market because it’s overpriced.”
Silman also agreed. “In today’s more balanced market, it’s all about how you position yourself. If you price a home accordingly for marketplace conditions and the neighbourhood it’s in, chances are good you’ll get offers. Maybe not multiple offers, but more likely one good solid offer at or just below list price.
“That’s all you need to sell a home. But at the end of the day, it’s up to the seller whether they accept or reject the offer. Reject a reasonable offer, and the reality is the home could sit on the market for a long time,” warned Silman.