Thinking of selling? This episode is for you! After weeks of fielding the same questions from anxious homeowners, Adam & Matt sit down to weigh the pros and cons of listing in this unchartered Covid-era! Should I upsize? Should I downsize? Is now the time to cash-in? This episode covers all these burning questions and reveals 3 PRO-TIPS for selling in uncertain markets. Time to plan your exit strategy and level-up!
Vancouver Real Estate News, Market Updates, Insider Tips, Stats, & Analysis
COVID-19 (Coronavirus) has put my plans to sell my home on hold. Should I sell my home in 2020?
You need to think about your real estate goals if you are thinking about selling your home. You are likely one of three types of people: people moving up in the market (upsizing), people moving down in the market (downsizing), and people looking to get out of the market (cashing out).
For upsizers, if you are seeing the type of inventory that you want to buy, there is probably no reason to hold off selling your home. If you are selling a lower priced property in this market, there is a good chance you will do well on the sell side. Historically, we are seeing most of the pressure in the sub one-million-dollar price band, which suggests you should bel able to sell your property for a competitive price. The entry level price points are typically the busiest in all markets.
If you are looking to purchase something in a higher price band, there should be less market pressure and competition for this more expensive product. This suggests you could get a bit of a deal with the absence of competition from other buyers. So, you should be able to get top dollar for your sale and a bit of a deal on your purchase, which is a good situation to be in.
Even if the market decreases in the short term, this should still be favourable for you. For example, a 5% market decrease on a cheaper property you are selling (loss to you) would mean an even larger decrease on the property you are looking to buy (gain to you). So, the net effect of this small drop in the market would still be in your favour, all things remaining equal.
There are also lifestyle aspects that need to be considered. Everyone has been spending more time at home these days and people may be craving more space. If you are looking to upsize into a larger space, you need to take into account how much this larger space will have a positive effect on your overall living situation in the long run. There is always the chance of a 2nd way of COVID-19 in the fall or next year, which should also be considered.
For downsizing, there are a couple of considerations. If we do see a market downturn, in the next 1 to 3 years, this could be bad news for downsizers. In a market downturn, generally speaking, the higher the price point, the slower the market. Sellers will have more challenges on the sell side due to less demand and more challenges on the buy side, because you will see more competition from other buyers. If price is one of your major considerations, you should be looking to sell as soon as possible. If you expect to see a 5% decline, you need to get out in front of the market as quickly as you can.
If you decide to wait for a market rebound to ensure you can still sell your place at what you envisioned, or your neighbour sold for previously, you need to make sure that you will be prepared to wait, 1, 3, 5 years to see this resurgence.
Lifestyle is also a major consideration for downsizers. People looking to move down in the market are generally driven by lifestyle: more walkable neighbourhoods, less yard work, less cleaning and maintenance. Currently, COVID-19 may have flipped this notion on its head and people in single family homes may be thankful that they have a little bit of extra space right now. This virus is not forever though and in 2-3 years hopefully things are back to normal and people who made the move may appreciate their new, walkable environment. It may have meant they were quarantining for the short term in a smaller space, but it is also a newer space. Newer spaces are often nicer to deal with when you are forced to be inside.
This group would include investors that are looking to sell, people living in Vancouver now, but thinking of cashing out and moving to a smaller town in the surrounding area, and people concerned about weathering another market cycle who are looking to sell out now and rent instead.
For investors, it is very hard to sell a tenanted property right now. There is an emergency imposed by the province where tenants cannot be evicted. Also, due to COVID-19 safety concerns, a tenant does not need to allow for showings. This combines to make tenanted properties very difficult to sell. The best option would be to sell to another investor, but many investors have hit pause right now on investment properties due to general economic factors and possible rent deferrals to delinquencies.
For the other two groups (looking to move or looking to rent), it is a financial question. You are trying to determine if you should sell now for the price you know or wait 1-2 years to pull the trigger. CMHC has recently published a report suggesting Canadian real estate could drop up to 18% in the future. Will your property be worth more or less in 2 years? Given this scenario, it is best to sell sooner than later and go with the price you know. If current prices work for your financial situation, this maybe the best you can do. You can’t predict the future and many economists are predicting a market decrease in the short term. Better to make your decisions based on the market at this time over an unknown future value. It is important to note that this advice applies for people looking to exit the market in the short term. If you are comfortable to wait longer and hold the property for more than 5 years, there is a good chance that the market will weather the storm and be back stronger than ever. Vancouver real estate has historically been a great investment in the longer term.
I’ve decided to sell my home during the COVID-19 (Coronavirus) crisis. When do I sell?
Currently, we are headed into the summer of 2020. Historically, summer months are slow for real estate with a pickup in the fall, but this year may be different. Many people’s vacation plans have been put on hold this summer and increased time at home has ignited people’s desire to get things done and make real life decisions. There is also the looming threat of another wave of COVID-19 in the fall which may force everyone back indoors again. For these reasons, the current time is a great time to have your property on the market. When COVID-19 hit in the Spring, both buyers and sellers hit pause. Currently, both buyers and sellers are coming back to the market, but there is still a shortage of good inventory. This suggest less listing competition and better exposure for your property right now.
3 Pro Tips for selling your home:
- Do Not Chase the Market, Let the Market Chase You
Active market comparatives are your best friend when pricing your property. Do not rely on prices from 3-6 months ago, especially in an uncertain or declining market – they are meaningless. Make sure you are looking at recent market sales, make sure your agent is speaking with other agents in the area and make sure you know what the competition is and what the activity is. This will inform you to select the correct price.
If you are looking backwards and you are priced too high, you miss the market. By the time you price adjust to something lower, you may have missed the market again. This cycle will continue repeating, wasting your time and money. Eventually, you may end up selling months down the road for a price much lower than you could have got it you had just priced your property correctly from the outset.
- When selling your property, think like a buyer
Generally, in uncertain markets, sellers are looking to the past for prices and buyers are looking to the future. You have to put yourself in a buyer’s shoes to make sure your price makes you stand out against the competition. You also need to be aware of other properties you are competing against and the activity level of these properties. This will inform our pricing decision.
You also want to understand what the buyer is thinking about your property and what the potential objections to your property are. Anything that is in your control, deal with it. You want to address potential objections before people have a chance to notice or point them out to you. This will make for a quick and successful sale.
You also need to think about your unique selling proposition and hammer this home. What makes your place stand out from other competitor’s properties and makes your property a ‘tier one property’. Isolate this unique selling aspect and create a market strategy around it. Your realtor can help you will this.
- A well executed launch is always better than a quick launch
First impressions matter! You want your listing to launch with good, well thought out marketing, great photos and all controllable objections addressed. Listings that launch without these aspects tend to go unnoticed when viewed alongside other competitor properties. Once your property has made a poor first impression, it is tough to gain that missed momentum again. The best time to sell your property is in the first couple of weeks after launch. If you have spent the adequate preparation time, your listing should launch with the momentum you need.
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