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Pricing your home in a down market

Pricing your home in a down market

Buyers across the Lower Mainland are taking a “wait-and-see” approach, opting to sit on the sidelines as prices throughout most local regions are either falling or flattening.

This is also true on the Sunshine Coast. Despite having the lowest benchmark price in the Lower Mainland, buyers are no longer rushing to the Coast to buy a comparatively affordable home. Recent increases in interest rates combined with the belief that further price drops could be coming are giving these buyers reason to pause.

The market will eventually adapt to the new reality of stricter mortgage qualification rules but until that happens, expect to see more of what we’ve experienced throughout most of 2018 – an oversupply of sellers and a lack of motivated buyers.

Now more than ever, it’s critical that sellers price their home correctly and market it aggressively.

Sellers can also expect to see lowball offers in current market conditions.

If you are selling your home and receive an insultingly low offer, what strategy can be used for dealing with low-ballers?

Your first instinct may be to dismiss the offer but my advice is to work every offer you receive, especially in a balanced or down market. When the market slows, buyers can evaporate so try hard to negotiate that offer up to where you want it to be.

In the past, I’ve suggested that my client counter with a price that’s slightly lower than list. If the buyer comes back with a new offer that’s substantially higher than the original, you may be able to make a deal. However, if you get another low-ball offer, it’s likely the buyer is wasting your time.

But if all you’re getting are low ball offers, buyers might be trying to tell you something. Ask your realtor to review recent comparable properties – if the market has shifted since you listed, you may need to consider dropping your price.

So how do you price your home to sell?

When selling your home, smart pricing is crucial. A common misstep is to price your property too high in order to give yourself some room to negotiate down to the price you actually want.

This is the worst thing you can do. The average public are not professional real estate agents but they ARE the ones that choose what houses to see. Regular buyers don’t see a price that can be negotiated down: they see an overpriced home and keep looking.

My preferred strategy flips this concept on its head. I recommend that my sellers price their property so it’s a slightly better value than other properties in that same range. It’s counterintuitive but by pricing your home lower, you can end up with more demand, more competition, and the best price possible for your property.

I go into more detail on my pricing strategy in my book, “Setting a New Benchmark – The Straight Truth on Buying and Selling Real Estate in Canada.” Visit TBonTheCoast.com for your free copy.

Tony Browton’s blog can be found at http://www.truebluerealty.ca/blog

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