It’s no secret: it’s a sellers’ market here in Cambridge, Kitchener-Waterloo, Guelph and, well, pretty much everywhere in Southern Ontario.
There’s a flood of buyers and, locally speaking, there just aren’t enough homes on the market to keep pace. Buyers are fighting to get their dream home and, as a result, sellers are reaping the financial rewards.
So how, in this scorching liquid hot magma market, are there some homes that continue to linger around like the scent of last week’s chili cookoff?
Unless you’re selling a luxury home or a rural property that will inherently take longer because there just aren’t as many available buyers, the reason is almost always…
The list price needs to be somewhat in line with the value of the home. Sure, prices have gone up across the board in 2016, but that doesn’t mean buyers are willing to pay anything for anything. They still want value – even if relative value has increased significantly – and, despite the low supply, you’re still competing with other homes.
While overpricing can happen for a number of reasons, the key is to be responsive, look at the data available to you, and make quick adjustments.
Here’s how to quickly identify whether or not your home is overpriced.
1. No showings in the first week.
Dead giveaway. Think about it: qualified buyers in your home’s price range have looked at your home online, checked out the pics, read the description…and moved on. Even with low inventory, they’re not willing to EVEN TAKE A LOOK with the hope that they can get a reduced price. You’re likely way off.
What’s really bad about this? If you’re off the mark by this much, you’re missing out on a flood of qualified buyers who would likely love your home at a lower price.
What do you do if you have no showings?
Get your home price down to a proper, more attractive level, take advantage of the many buyers who are still out there, and expect more showings and an offer (or five).
2. Showings, but no offers.
You’re closer – but still off. Buyers have deemed you home worthy of a visit at your current price but, upon closer inspection, haven’t pulled the trigger – even when there are no competing offers, allowing them to negotiate a lower price. Buyers have simply found better options for the money.
When to start considering a price adjustment?
Definitely within the first month on the market. For starters, your agent should look at recent home sales in your area. If the average home in your neighbourhood is selling within 14 days for 99% of asking price and you haven’t received an offer after 21 days, you may need a price drop.
Also, what are similar homes selling for per square foot? If your home’s price per square foot is 10% higher than the selling prices of comparable home, you may need a price drop.
Time is of the essence. Use the data available to you and correct your course sooner than later.
3. Agent Feedback
In addition to the sales data your agent should review, they should also request feedback from all buyer agents who showed your home. This information is gold – straight from the horse’s mouth.
At least with feedback, you may be able to identify weak spots that could be shored up quickly and prevent a price drop. Examples:
- The cat smell is too strong = get your home professionally cleaned and deodorized
- The backyard is a mess = clean it up, do some landscaping
- It feels too small = paint rooms light colours and declutter
But, if you can’t fix issues without significant time and/or expense, a price drop may be the most realistic route to ensure you’re in line with your home’s value
The Rewards of Action.
By being responsive and making informed price decisions, you’ll attract more buyers and offers, with the added potential of a bidding war. At the end of the day, it’s more likely that you’ll sell for more at a reduced-but-accurate price than you would waiting 6 months at an inflated price.
Your agent will be key in providing market insights and helping you make quick decisions that allow you to take advantage of this incredible market.