Selling Your Home in a Buyer's Market? Let's Rip Off the Band-Aid!

Selling a home in a buyer's market can be tricky, but do homes still sell? The answer is YES!

Having said that, only homes with really aggressive prices seem to sell. What does that mean? Let me back up a bit and check the definitions of different markets.

As a general guideline, here is how we define different real estate markets:

Seller's market: Typically less than 3 months of inventory.

Balanced market: Typically 4–6 months of inventory.

Buyer's market: Typically more than 6 months of inventory.

Explanation of the above: If there were no new listings from today onwards, we would have enough properties available to sell for the next 6 months.

However, the GTA real estate market has its own twist to it. Even though most areas show inventory of less than 6 months, some properties can take over a year to sell, while others will sell within a week. How come?

There are a few points to it, and I will address them now.

PRICE – LOCATION – CONDITION – COOL HEAD – PRICE, PRICE, PRICE!

PRICE:

The first thing you should learn is my "erase-erase" technique, and yes, I know, that one is a very painful one!

You will need to force yourself to forget the home values during the bubble era. Those numbers may not be back for many years, and nobody really knows when, or even if, we will see them again.

It is not important how much you could have gotten if you had sold then, since, obviously, you had valid reasons for not selling at that time. So why stress out?

As my favourite person, Warren Buffett, once said, in essence, "you do not lose or gain money on investments until you actually sell them."

Once you make peace with this fact, it will be much easier for you to determine your listing price, which should match today's market. I will talk more about it later.

LOCATION:

If you have a house on a busy road in a suburban area, that will likely affect how fast and for how much your property will sell.

However, if you have a property on a busy road in downtown Toronto, that likely won't be as much of an issue. If someone is looking for a property downtown, they have already set their expectations for that location. And since there are not many houses available downtown, those properties can still sell fast and for good money, even in today's market.

CONDITION:

In today's market, due to still-high prices and interest rates, buyers are not left with much money, so they will likely be looking for "turn-key" properties.

This means your property must be presentable and updated. And if you have a basement unit with a separate entrance, your home will likely sell faster than homes without one.

Also, please remember that there will always be people who will not like your home for one reason or another, but all you need is that ONE buyer who will like most of it.

So many times, I have heard contradicting feedback on the same house. One party will say they disliked the layout and the kitchen, and then someone else will come in and say how they absolutely LOVE the layout and the kitchen!

Therefore, don't take it personally. Have a cool head and wait for that one right buyer.

COOL HEAD:

I am sure you haven't had time to implement my "erase-erase" method yet, so you still remember how houses were selling within a week or two. And if they weren't sold within a month, everyone would ask, "What is wrong with this house?"

Again, we need to forget about the bubble era!

In today's market, where buyers lack confidence due to the economic and world situation, and are hoping that market prices will go down even further, they are hesitant to commit.

It takes them much longer to place an offer, and they don't like to offer market value, even if your property is priced well.

Buyers believe they can lower the price of every property they see by a GAZZILLION dollars, and I don't blame them!

The digital world keeps feeding their heads with messages about how bad the market is and how prices are going down...

Sounds familiar?

PRICE – PRICE – PRICE!

Now we will be ripping that Band-Aid off, and it will hurt, so I apologize in advance!

First things first: If you SERIOUSLY do not need to sell, stay off the market for the next few years!

If, however, you do need to sell, you will need to change your mentality completely.

Please read the paragraphs above a few more times, and let's do some calculations.

I mentioned at the beginning of this article that if you need to sell today, you will need to price your home aggressively.

How do we do that?

Check the most recent comparables, and whatever the last selling price for a similar property was, you may need to price your home lower.

And NOT with the intention of creating bidding wars. Just simply list it lower!

How much lower will depend on the property and location, and we can determine that together.

Remember, your property is not worth how much you paid for it, or how much you think it is worth, or how much you need, or how much your neighbour says it is worth.

Your property is worth how much a buyer is willing to pay, and you are willing to accept.

Yes, I know, those words sound cruel, but it is the truth.

To make it hurt less, how about we calculate how much you've saved by living in it?

1. How much money went towards the principal from your mortgage payments?

2. How much would it have cost you if you had been renting all these years instead?

Hopefully, those numbers can soften the blow of losing some of the value on your sale.

For those of you who have worked with me before, you know that I tend not to "sugarcoat" things. But writing this article made even ME uncomfortable!

However, it needed to be done.

I feel so bad for sellers struggling these days, and giving them false hopes is not something I believe is helping anyone.

Do the numbers, cut your losses, and never look back!