By not listing, Sellers have created a Sellers' market. So why are they not using it to their full advantage?
In the last few weeks, almost every offer situation I was involved in had multiple bids. One had 3, another had 4 and the last one had 12! Why the rush? It always comes back to the basic rule of supply and demand. Right now, the supply of homes in good condition and reasonably priced is still very limited. But the demand is high. There are plenty of qualified buyers out there ready to purchase a new home.
– The papers tell you that the sales are down 11% in March compared to 2010.
– As of March 31, 2011, there were 16,616 active listings in Toronto versus 18,684 on March 31, 2010
– As of March 31, 2011, there were 9,262 sold properties in Toronto versus 10,430 on March 31, 2010
So it isn’t that there are not enough willing buyers out there, it’s that there are simply not enough good homes for them to choose from. Why not? Because sellers are not listing. And why not? It is a good question. Let’s look at a few factors and some of the reasons why most sellers are waiting instead of "pulling the trigger" and why the waiting approach isn’t always the best.
Timing is Everything
If you want to sell your house profitability and painlessly, the right marketing, a good agent, and proper pricing are certainly very important, but have you thought about the importance of timing? Often just a few weeks can make a difference of thousands of dollars, either gained or lost.
Just like the price of gasoline or heating oil fluctuates depending on supply and demand, real estate prices are subject to the same rules — when there are more buyers than sellers, the prices rise.Conversely, the more homes there are to choose from, the less competitive the market becomes. It may take longer to sell and it may affect the price.
Supply
Sellers control the supply. A shortage is created when sellers withhold from selling. That in turn creates a heavy seller’s market. (These conditions often lead to new price records on a street or in a particular neighbourhood.) Ironically, sellers create a good market for themselves, but don’t take advantage of it. Why not? Why do sellers withhold? Here are some myths that sellers tend to believe in:
1. Buyers don’t come out in cold weather: Do they ever! There are plenty of serious buyers out there. They are not in the slightest deterred by the weather or the snow when they want and need to buy a house.
2. My house looks prettier in the spring: But so does everyone else’s.
“My tulips will be coming up soon.” Yes, but so do your neighbour’s tulips. And so do all For Sale signs. Your bare yard may get you a higher price now than your green garden in the summer.
3. We haven’t found our next home yet: This could be a valid concern – what if I can’t find another home? That can be addressed by negotiating a long and flexible closing date (which I have done on many occasions) to give yourself enough time to look and buy when the supply is greater. This allows you to get the top price for your current house while allowing you time to find the right home.
Demand
As I said before, there is a bountiful supply of buyers out there who are committed to buying a home.
1. Historically low interest rates: In spite of all the talk about interest rate increases and the slight rise in fixed-term rate by the major banks, interest rates remain at historical lows in Canada. Many home buyers are looking to take advantage of favourable lending conditions.
2. Buyers like to move in the Spring and Summer: To make that move, they have to begin their search far in advance. They may need 30 to 90 days for their search time, plus another 60 to 90 days for closing, making this a 3 to 6 month process. Buyers like to move after the end of the school year and before the beginning of the next. They are looking right now.
So just remember: timing is everything…or almost!
By not listing, Sellers have created the Sellers' market. So why are they not using it to their full advantage? The demand cannot get any higher right now. If you are planning a move any time this year, what are you waiting for?
Did you find this article interesting? Here's what you can do next...
Add your feedback and comments below!... We'd love to hear your thoughts on this topic.
Put Vlad's Seller's expertise to work for you!... If you're looking to sell your home, contact Vlad now to get it done right.
Know someone who is selling their home?... Use the link below to Share or Email this article so they too can benefit from this knowledge.
Tagged as:
Videos
Timing Is Everything… Or Almost.
By not listing, Sellers have created a Sellers' market. So why are they not using it to their full advantage?
In the last few weeks, almost every offer situation I was involved in had multiple bids. One had 3, another had 4 and the last one had 12! Why the rush? It always comes back to the basic rule of supply and demand. Right now, the supply of homes in good condition and reasonably priced is still very limited. But the demand is high. There are plenty of qualified buyers out there ready to purchase a new home.
– The papers tell you that the sales are down 11% in March compared to 2010.
– As of March 31, 2011, there were 16,616 active listings in Toronto versus 18,684 on March 31, 2010
– As of March 31, 2011, there were 9,262 sold properties in Toronto versus 10,430 on March 31, 2010
So it isn’t that there are not enough willing buyers out there, it’s that there are simply not enough good homes for them to choose from. Why not? Because sellers are not listing. And why not? It is a good question. Let’s look at a few factors and some of the reasons why most sellers are waiting instead of "pulling the trigger" and why the waiting approach isn’t always the best.
Timing is Everything
If you want to sell your house profitability and painlessly, the right marketing, a good agent, and proper pricing are certainly very important, but have you thought about the importance of timing? Often just a few weeks can make a difference of thousands of dollars, either gained or lost.
Just like the price of gasoline or heating oil fluctuates depending on supply and demand, real estate prices are subject to the same rules — when there are more buyers than sellers, the prices rise.Conversely, the more homes there are to choose from, the less competitive the market becomes. It may take longer to sell and it may affect the price.
Supply
Sellers control the supply. A shortage is created when sellers withhold from selling. That in turn creates a heavy seller’s market. (These conditions often lead to new price records on a street or in a particular neighbourhood.) Ironically, sellers create a good market for themselves, but don’t take advantage of it. Why not? Why do sellers withhold? Here are some myths that sellers tend to believe in:
1. Buyers don’t come out in cold weather: Do they ever! There are plenty of serious buyers out there. They are not in the slightest deterred by the weather or the snow when they want and need to buy a house.
2. My house looks prettier in the spring: But so does everyone else’s.
“My tulips will be coming up soon.” Yes, but so do your neighbour’s tulips. And so do all For Sale signs. Your bare yard may get you a higher price now than your green garden in the summer.
3. We haven’t found our next home yet: This could be a valid concern – what if I can’t find another home? That can be addressed by negotiating a long and flexible closing date (which I have done on many occasions) to give yourself enough time to look and buy when the supply is greater. This allows you to get the top price for your current house while allowing you time to find the right home.
Demand
As I said before, there is a bountiful supply of buyers out there who are committed to buying a home.
1. Historically low interest rates: In spite of all the talk about interest rate increases and the slight rise in fixed-term rate by the major banks, interest rates remain at historical lows in Canada. Many home buyers are looking to take advantage of favourable lending conditions.
2. Buyers like to move in the Spring and Summer: To make that move, they have to begin their search far in advance. They may need 30 to 90 days for their search time, plus another 60 to 90 days for closing, making this a 3 to 6 month process. Buyers like to move after the end of the school year and before the beginning of the next. They are looking right now.
So just remember: timing is everything…or almost!
By not listing, Sellers have created the Sellers' market. So why are they not using it to their full advantage? The demand cannot get any higher right now. If you are planning a move any time this year, what are you waiting for?
Add your feedback and comments below!... We'd love to hear your thoughts on this topic.
Put Vlad's Seller's expertise to work for you!... If you're looking to sell your home, contact Vlad now to get it done right.
Know someone who is selling their home?... Use the link below to Share or Email this article so they too can benefit from this knowledge.
Related Posts
Tagged as: Videos