Woah. What a year it has been in the world of Guelph real estate.
The dust is just starting to settle now, after a wild first quarter that left even the most seasoned veterans in this business shaking their heads in disbelief. Bidding wars, cash offers, bully offers… it really was a frantic scene for Guelph home Sellers and Buyers. But the scenery has changed.
At the end of March, I started to notice a minor shift, and I wrote about inventory changing and things levelling out a bit. It was a slow process in some ways, but without question this is a different, more tame market. In the last week, requests for showings have slowed, competitions have decreased as a whole, and open house attendances were down. Homes are still selling, of course, but we are seeing properties listed as sold conditionally – instead of the “normal” cash offers of the first quarter. Even the return of the “Sale of Property” condition for Buyers… who’d have imagined it even a month ago. But inventory is higher than I have seen it in years, and suddenly buyers have options.
So. If you’re thinking about selling your Guelph home, what does this shift in the market mean? It means that listing strategies, and frankly Sellers’ expectations, need to shift as well. For example:
Home Values Today
Will we see a drop in Guelph home values? No, I don’t think so – at least not a significant one. Prices skyrocketed in Guelph, but those waiting for a crash are going to be disappointed. We have a highly attractive quality of life in Guelph, an extremely stable economy, and the trend of GTA in-migration is not going to stop. And, let’s be clear, it was those GTA Buyers who, with the help of their outside-Board Realtors, drove Guelph home prices through the roof. What’s done is done, and I do not see prices dropping significantly, if at all.
Market & Promote Extensively
One of the first signs I saw in late spring was a shift in Buyer expectations. Prices rose, and Buyer expectations quite naturally rose along with them. I saw homes that weren’t de-cluttered or Staged – in some cases, even cleaned – and they struggled on the market. No, even in a silly-hot market, homes do not “sell themselves,” and you cannot expect Buyers to pay a premium for a house that is a hot mess. Those agents and Sellers who rushed to market without properly preparing homes for sale were, I think, caught off-guard when bidding wars failed to materialize.
In today’s market, do not list your home for sale until it shows optimally. Even when you make it look fantastic, it still may take a little longer to sell, and competition may or may not materialize. But, if you put it out without even making it look as though you’ve tried, you’ll have a disappointing result.
Use Reasonable Pricing Strategies
I’ve never been a fan of the “price way below market value to drive a bidding war” approach. To me, it seems risky for Sellers, and manipulative to Buyers. It was a tough spring, working with Buyers who would get excited about a house, only for me to have to find a way to explain to them that the listing price was not really the listing price – knowing perfectly well that a full-price offer, even, would be rejected.
We saw many cases where listing agents counselled clients to list aggressively – but when offers-day came and they got full-priced offers, even, those Sellers rejected them – or signed back well over asking. When did that ever make sense? It didn’t then and it doesn’t know.
Do not list your home for a price that is much less than you are prepared to accept. Period. That is our new market reality and you are wasting your time and Buyers’ time by putting something up for sale that is dramatically under fair market value.
As for holding on offers, it’s hard to say. Again, from the Buyer standpoint, it can be a bitter pill to swallow and there is a tremendous amount of resistance to that strategy. Fair enough. Many think it’s games and b.s. and, sometimes, it is. My own thought was that, when the market was wildly fast-paced, it became a necessity to hold on offers. Otherwise, offers were literally coming in, sight-unseen, on day one from agents who we had never even heard of and who couldn’t possibly have given their Buyer clients sound advice. It was ridiculous. So we had to slow the market down and give people a chance to see the property and determine fair market value.
But that was then. Now, in a more balanced market, it isn’t really a huge challenge to determine a fair price for a home. So, it’s worth giving some consideration to listing a home without holding on offers. Set a fair price, based upon recent sales (there are plenty of comparables out there, now) and let the market compete for it – yes, on day one, even. No games, no b.s. – just sell your home for a price that is fair and justifiable.
Hire an Expert
I don’t know when there was ever a good time to trust the sale of your largest investment to a novice, but it sure isn’t today. Literally on a week to week basis, we are experiencing significant fluctuations in the market, and responding to them. These are challenging times for Sellers, and working with a seasoned Listing Agent gives you a leg up when it comes to advice on proper marketing, pricing, and Staging strategies.
Shift Your Expectations
It’s always a hard position to be in, when you are selling a home just after “the guy down the street” sold his well over asking and got 15 offers. But that was his house, and that was then. Today, my sense is that a more reasonable expectation is a week or even two for sale, and perhaps to a Buyer that brings some conditions to the table.
Myself, I welcome the return to a less frantic market. Buyers should be able to conduct basic due diligence on things like financing and home inspections. And we should be, as Listing Agents, helping our Seller clients negotiate — not simply racking up ridiculous offers and then hoping that the transactions close. Here’s a little-known fact: a lot of them have not. Many Buyers experienced such profound remorse that they walked away from their deals (and, in some cases, their deposits.) In other cases, lenders pulled financing on deals with outrageous sale prices that failed to come even close to appraisal value.
So, while it might not seem it, I do think the end of the frenzy is a good thing for Sellers. Of course, it also represents new opportunities for Buyers. But that is another article….