US & Canada
The housing market in the Greater Toronto Area is slowing down, and prices are on a downward trajectory from the peak attained in last April. While a crash is still unlikely, the recent news is that interest rates are going up again, which will likely mean that prices won't increase for the next several months.
For people interested in selling their home, here are three tips that will make sure you maximize your profit in a changing market. First and foremost, sticking to the same strategies and expectations that worked when the market was red hot won’t do. In particular, choosing to have a bidding war and expecting to sell in less than a week with multiple unconditional offers is no longer realistic. There just isn't enough demand to meet these expectations. A better strategy is to have patience, and not to overreact to the first week of the listing. Since new buyers come into the market every day, eventually someone will come who would be willing to pay market value. This results in a much higher sale price than settling for a low-ball offer in the first few days of the listing.
Homes taking longer than a month to sell will become more commonplace as the market continues to trend from being a seller's market to a buyer's market. Sellers need to remember that the past few years of speedy sales and record prices have been an exception, and that in order to maximize their profit they may need to be patient.
Secondly, paying hefty commissions to agents should be avoided. Huge gains in house prices over the last several years has also resulted in agents charging more commissions. Even with the recent drop, home prices are still up about 50% compared to three years ago, which means that commissions are also 50% more expensive. Paying 50 per cent more when the job is exactly the same may not be a smart financial decision and will eat into your profits, so it is worthwhile to consider other options. Instead of giving your profits to an agent, consider selling your home privately. There are proven options in the Greater Toronto Area that offer things like MLS listings, appraisals and legal help, all for a fraction of the cost of a traditional agent.
While some sellers are hesitant to try anything different, there have been thousands of sellers who have done this successfully, so it's worthwhile to fully explore all options before making a final decision. If you are comfortable giving buyers a quick tour of your home, this is definitely something worth considering. As technology continues to evolve in the real estate industry and market data becomes more available, sellers will continue to look for options other than a traditional agent.
Thirdly, having your home in perfect show condition has always been good advice, but now it is more true than ever. Beyond basic tidying and decluttering, it is worthwhile to invest in a professional stager, and to include things like virtual tours, online videos and even drone photography in your listing.
Another side-effect of the higher home prices over the last several years is that services like stagers, painters and videographers would now take up an even smaller percentage of the overall sale price. If adding these services makes your listing sell for even one per cent higher, they will more than pay for themselves and will be a smart investment. Buyers can still be wowed by an amazing presentation, and not only will your house sell for more money, it will likely sell in less time, too.