In my last post I commented in general on the matter of pricing a property to sell. This has become an increasingly important component in successfully marketing your home to potential buyers and one of the key reasons for that is the Internet.
Today’s buyers have a tremendous amount of information at their fingerprints and are well informed. You’re reading this blog for example and I presume you are doing so to amongst other things, expand your awareness and to be better informed. Most buyers today for real estate (80+%) and other items spend countless hours online looking for and at the products or services they are contemplating purchasing. Shopping for real estate is without question one of the first online frontiers that consumers flocked to. Here in Canada http://www.realtor.ca/ receives 3 million or more visitors a month looking at properties that are posted on the various Multiple Listing Services (MLS®) of real estate Boards across the country. Everything is there, room and overall house sizes, community and tax information, photos, prices and more. Buyers get a very good picture of what’s out there. They can tell if the same home comes up for sale month after month. They can compare property listings and get a good sense of their relative values, quickly determining in their own minds at least, which ones are priced right and which ones appear to be over-priced. The bottom line is there’s no fooling anyone and sellers shouldn’t kid themselves alone or with the help of their REALTOR®, into thinking they are going to be the lucky ones and find that one unsuspecting or uninformed buyer that is going to over-pay them for their property. In our local market, essentially 1 out of 3 properties listed for sale actually sells so with that amount of inventory to choose from, nobody needs to overpay for anything.
If you are contemplating the sale of youe home this spring I encourgage you to begin the process by looking at your property through the eyes of a potential buyer(s). Buyers obviously have expectations they want met and this goes far beyond just the colour of the walls or the overall appearance and condition of the home.
More to come….
Pricing Your Property to Sell
I have talked on occasion in the past about the importance of pricing your property to sell in that it must be competitively priced in order to be "in the market" not just "on the market." Whether the home is $200,000 or $2 million correctly having it priced is the only way it is effectively going to get SOLD!.
In 2010, 30% or roughly 1 in 3 of the properties listed for sale on the MLS® system of the Georgian Triangle Real Estate Board (GTREB) sold. In fact for the past six years the number of expired listings has exceeded the number listings that have sold. That to me is a very telling statistic. First, REALTORS® are not doing their jobs in terms of preparing a thorough comparable market analysis in order to arrive at a list price that is consistent with market value and secondly, some sellers just aren't listing.
When I go into a home I have a faily good sense of what the property is worth. At the same time, gone are the days when a REALTOR® can or should, just walk into your home and shoot from the hip, tossing out a price that will ultimately get you the best price within reasonable time frame.
As a Market Value Appraiser (MVA Residential) I put a great deal if time into pricing properties that I am being interviewed by the owners to list. At the same time, no matter how technical or thorough I may be in arriving at a price, it is not a pure science as a property is ultimately worth what a buyer is willing to pay. The thing is if I cannot sit down with a potential buyer that approaches me about one of my listings and demonstrate to them (on paper) why the property is listed where it is, I shouldn't take the listing. A REALTOR® cannot in fact fulfil their fiduciary responsibilities to a seller and or buyer by taking a listing that they know is over-priced. Amongst other things, our code of ethics states: "A Registrant shall demonstrate reasonable knowledge, skill, judgment, and competence in providing opinions, advice or information to any person in respect of a trade in real estate."
In recently securing a listing, the sellers informed me that I had given them the lowest price out of the REALTORS® they had spoken with but I also provided them with the most compelling listing presentation as to why they should list at that price. That's not the first time I have been told this nor will it no doubt be the last. Conversely I also lost a listing recently where the listing REALTOR® gave them a price $200,000 or 30% more than my evaluation. Due to the fact that the pricing of properties is not a science, my analytical work may not always be spot on but I'm not 30% off either.
I am going to spend more time discussing the matter of pricing in future posts as it's a critically important component regarding successfully selling and buying property. In the meantime I am going to leave you with this one thought. As a professional full-time REALTOR® I do not consider myself to be a "sales person." Our roles have and will continue to change dramatically in the years ahead. Similar to a home inspector, lawyer, accountant or other specialist in a given field, we are "service providers." We are held accountable to render conscientious service to clients and customers and there is a difference between those two parties as well. More on that later.....
In 2010, 30% or roughly 1 in 3 of the properties listed for sale on the MLS® system of the Georgian Triangle Real Estate Board (GTREB) sold. In fact for the past six years the number of expired listings has exceeded the number listings that have sold. That to me is a very telling statistic. First, REALTORS® are not doing their jobs in terms of preparing a thorough comparable market analysis in order to arrive at a list price that is consistent with market value and secondly, some sellers just aren't listing.
When I go into a home I have a faily good sense of what the property is worth. At the same time, gone are the days when a REALTOR® can or should, just walk into your home and shoot from the hip, tossing out a price that will ultimately get you the best price within reasonable time frame.
As a Market Value Appraiser (MVA Residential) I put a great deal if time into pricing properties that I am being interviewed by the owners to list. At the same time, no matter how technical or thorough I may be in arriving at a price, it is not a pure science as a property is ultimately worth what a buyer is willing to pay. The thing is if I cannot sit down with a potential buyer that approaches me about one of my listings and demonstrate to them (on paper) why the property is listed where it is, I shouldn't take the listing. A REALTOR® cannot in fact fulfil their fiduciary responsibilities to a seller and or buyer by taking a listing that they know is over-priced. Amongst other things, our code of ethics states: "A Registrant shall demonstrate reasonable knowledge, skill, judgment, and competence in providing opinions, advice or information to any person in respect of a trade in real estate."
In recently securing a listing, the sellers informed me that I had given them the lowest price out of the REALTORS® they had spoken with but I also provided them with the most compelling listing presentation as to why they should list at that price. That's not the first time I have been told this nor will it no doubt be the last. Conversely I also lost a listing recently where the listing REALTOR® gave them a price $200,000 or 30% more than my evaluation. Due to the fact that the pricing of properties is not a science, my analytical work may not always be spot on but I'm not 30% off either.
I am going to spend more time discussing the matter of pricing in future posts as it's a critically important component regarding successfully selling and buying property. In the meantime I am going to leave you with this one thought. As a professional full-time REALTOR® I do not consider myself to be a "sales person." Our roles have and will continue to change dramatically in the years ahead. Similar to a home inspector, lawyer, accountant or other specialist in a given field, we are "service providers." We are held accountable to render conscientious service to clients and customers and there is a difference between those two parties as well. More on that later.....
February Real estate Sales Continue to Show Strength
Area real estate activity in February continued to show a strengthening in both sales and listing activity across most municipalities in the Georgian Triangle, reflecting further improvements in consumer confidence from the same time last year. Sales reported through the MLS® system of the Georgian Triangle Real Estate Board (GTREB) posted a 38% increase in dollar revenue for the month with sales of $40.1 million versus $29.2 million one year ago. Unit sales were up slightly during the month, 9% with a total of 117 properties changing hands compared to 107 last year.
As was the case in January, we continue to see significantly higher sales of upper-end properties which is the main factor driving the increased sales revenue. A total of 4 properties sold valued at over $1 million with one property hitting an all time high for the area of $3.25 million. By comparison there were no $1 million dollar sales in the first two months of 2010.
Year-to-date MLS® sales revenue totals $62.8 million up 27% from $49.6 million in the first two months of 2011. The number of new listings that have come onto the market this year total 923 properties up 8% from 856 new listings at the end of February 2011. Despite an increase in the number of listings, there is still for the most part an insufficient supply of properties for sale by property type, in any given area and in several price ranges. This is serving to help balance the market in favour of neither buyers nor sellers. There is however one exception. Despite a sharp increase in the sale of $1 million + properties, there are currently 63 active listings for homes priced over $1 million.
On a year-to-date basis the municipalities of Collingwood and Wasaga Beach are both showing a reduction is sales activity of 7% while sales in Grey Highlands are down 40%. Conversely Clearview sales are essentially equal to the first two months of last year, while sales in the Blue Mountains are up 30%.
Taking a quick look at condominium sales indicates that year-to-date MLS® condo sales total 37 units down from 44 units sold in the first two months of 2010. Condo sales in the Blue Mountains have increased this year with 16 sales being reported compared to 12 in 2010, an increase of 33%. Collingwood condo sales on the other hand have taken a hit this year. Through the end of February there have been 16 MLS® condo sales in Collingwood compared to 30 in the same period last year. This may be just an aberration and we will continue to watch this situation closely in the coming months to see if it is indicating a more permanent trend.
The average residential sale price year-to-date is $352,259 up 22% from the average sale price of $287,239 a year ago. This increase can for the most part be attributed to the significant increase in home sales over the $1 million mark in the first two months of the year and should not be construed as price appreciation across the overall market.
For more detailed markeyt inform ation
Market Forecasting
Without a doubt one the most frequently asked questions I get at “Open Houses,” social gatherings, in the grocery store and on the street etc. is: "how's the market?” This appears to be one of the most talked about subjects at dinner, cocktail parties and just in general no matter what the economic climate we may be in.Reporting on past market conditions is easy and I will cover year-to-date market activity in my next posting. What about the future? In this ever-changing globally driven world that appears to be an increasingly difficult subject for most to get a handle on. Companies typically did five year business plans. Five years in today’s world is an eternity so making five and even two or three year plans is almost worthless. Look at stock market activity, few seem to be able to foresee the signifiant swings up and or down that regularly happen in this seemingly volatile environment. The same applies for real estate. The old patterns of sales and listing activity for the most part have changed dramatically. Yes, new listings typically increase in the spring and taper of in the fall as do sales but in between those seasons it’s often a roller coaster ride of unprecedented proportions.
As previously noted the Canadian Real Estate Association (CREA) has just “boosted” their forecast for national resale home activity in 2011. Last November, CREA predicted a sales decrease nationally of 4.9% with a total of 402,500 homes anticipated to sell in 2011. In the coming months we will see how accurate these numbers prove to be and if will further forecast revisions will be required. No doubt many of you are experiencing the same forecasting dilemma in your own businesses. Budgeting for inventory, staffing and other requirements is often about as accurate as gazing into a crystal ball. The ball is increasingly cloudy and one must make adjustments on-the-fly in order to capitalize on business opportunities when they arise.
In my next post I will re-cap market activity in our area for the first two months of the 2011. That’s the easy part, what lies ahead is anyone’s guess and I will comment on that as well.
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