In our series, “Ask the Realtor”, we are featuring realtors with years of experience and expertise who are answering questions that will help you prepare your home for the market. There are many things a seller needs to know before they list their home, and we’re turning to the experts for their advice.
What is the most important thing sellers need to know about the competitive real estate market Ottawa is currently experiencing?
Most sellers will be aware that we have a strong sellers’ market at the present time and a very low level of listing inventory which means supply and demand is imbalanced with more buyers than sellers, particularly for entry level and mid-price range properties. This results in 30-40% (or perhaps more!) properties being sold in multiple offer or “bidding war” situations and selling over list price. These factors pushed average selling prices up by approximately 9% in 2019. This year we expect to see another at least another 5-6% selling price increase overall.
Sellers must keep in mind that in most cases, they will also be buying under these same market conditions, so while their selling experience and prospects may look very good, the buying side situation is very challenging and prices for what they may have been hoping to purchase, will also have escalated and be affecting by bidding wars, etc. Therefore, sellers have to get the maximum (or optimum) equity out of their existing property to make their overall buying and selling plans to work.
What can a seller do to have an advantage over another seller or property?
Buyers will pay the biggest premium for properties that are the most “move-in-ready” and are the most professionally presented. Being highly “move-in-ready” is especially important in this price escalating market, as most buyers are stretching their budgets to purchase the property and do not want to have to face additional costs to update a property after they move in.
Professional photos and online presence are critical and many things can be done in the sales planning stages, for one seller to shine above any competition:
Minor updates and repairs can be suggested by Realtors, stagers or professional moving transition organizations like Moving Forward Matters. These professionals may also be able to help facilitate other service providers or contractors to get necessary work done on a timely and co-ordinated basis thus taking a load off the seller.
What are the biggest mistakes a seller can make in this seller’s market?
- Probably one of the biggest potential seller issues in this market is a sense of complacency and the feeling that their property is guaranteed to sell quickly and for top dollar. Sellers can often become focused on where they are moving to and forget to place enough attention on the property they are leaving. Buyers have a very critical eye and if a property does not appeal to them online, they won’t even show up to have a look at it. Sellers should critically assess their existing property and give it a rating on how it compares to HGTV standards that buyers have come to expect.
- Sellers can easily under estimate the “time to market” for their property, particularly where 3rd party services and contractors are required. All the important planning steps and activities should be taking place long before the sellers are really focused on buying a property to move to.
- Being afraid to invest sensibly in 3rd party services and updates to the property being sold to optimize/maximize selling value. We don’t typically advocate major renos or investments but reasonable tweaks can really add value and marketability. The better a home shows online and in person, the better the market value will be. If spending $5,000-$10,000 can get you an extra $15-$20K or more, then is certainly worthwhile.
- Selling privately or not getting full MLS® exposure and maximum competition. Trying to sell privately in this market may be tantalizing for some but if you run the risk of leaving $20K (or more) “on-the-table” what has really been gained?
- Not having a solid “plan to sell” and “plan to buy” in place with their 3rd party professional team on board, well in advance.
Realtor, mortgage broker, lawyer, home inspector, stager, organizer/downsizing professional, insurance agent and trades people or contractors may all have a piece of a successful prep stage for a successful and less stressful, listing and sale.
- Failing to consult their Realtor prior to a new construction home purchase. Realtors can really add value to this process but too many new home buyers forget to involve their agent or “don’t want to bother them”.
Sellers should not be afraid to contact their Realtor 6 or even 9 months ahead of what they believe their moving time will be, as this will provide better planning timelines, facilitate any work to be done and ensure that the existing property is 100% “listing ready” (think HGTV “reveal” standards).
Gord McCormick is the Broker of Record for Oasis Realty, a boutique residential real estate brokerage that has been serving clients in the Ottawa area for 14 years. Gord has a wealth of strategies and tactics for both hot and cold markets which he shares via his blog at Oasis Realty, on Twitter or on Facebook.