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Selling strategies in a tricky market: Close the deal with these pro tips

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There are only so many strategies to use when helping a client buy or sell a home, and it’s important to know which ones to pull from your hat to get the deal done.

 

Negotiate and pivot: A must

 

“Real estate goes in cycles, so picking the right practice for the given market is key,” says realtor Toni Sing of Bel-Air Realty Group in Vancouver, who has been in the business for 13 years.

In this tough and uncertain market (deals collapse and buyers and sellers are nervous), she says it’s much harder to patch deals together. “Listing agents must have negotiation skills. If a listing agent is inexperienced, they’re less likely to fight for a (better) price.”

“It’s especially hard for new agents who have not seen a market like this before,” says realtor Desmond Brown of Re/Max Hallmark Realty Ltd. in Toronto. “Young agents who are new to the environment need to learn how to negotiate. Speak to more experienced colleagues. Pick their brains. If you’re on a team, speak to the team leader.”

Be prepared to pivot. Brown says he had a busy summer, after a slower than usual spring. “Then fall came and things slowed down. We had to adjust. It depends on the property, but in a location that is still hot, we still list aggressively and get over-ask. It’s a tale of two markets. Some areas are not going as quickly and sell close to market value,” he says.

He explains that if it’s in a good location, a property is going to sell and might draw multiple offers – it’s just going to take longer. Brown notes the average days-on-market according to TRREB in September was 30 days. He shares the listing inventory in Toronto for September was up 40 to 45 per cent and the average price was up by three per cent. So, it’s back to a more traditional appreciation of homes. “Real estate is still a good investment,” Brown says.

 

“Work it out so the buyers and sellers are happy”

 

“Contrary to headlines, the market hasn’t plunged. It’s not a buyers’ market yet. There’s still over three months of inventory so it’s not even a balanced market yet. If interest rates rise, there will be an increase in inventory. Then it will be balanced before becoming a buyers’ market.”

Brown, who has been in the business for 25 years, stresses the importance of building relationships with colleagues. For example, “give feedback on listings if your client is not interested. Work deals. Don’t get stubborn. Work it out so the buyers and sellers are happy.”

 

Be ready with a pre-approved mortgage and personal letter

 

On Oct. 25, the Bank of Canada didn’t raise rates, so Sing says, “The next six to eight months will be interesting. It means buyers will have more confidence and more time to go ahead with a deal.”

On the buying side, she recommends clients get a pre-approved mortgage so they’re ready to go without delay when a property becomes available.

“A letter of firm pre-approval from a mortgage broker submitted with the offer shows sellers they’re qualified and serious,” Sing says. She also recommends buyers provide a second letter to the family about “why they want to buy the house.”

She notes that if there is a large difference between the asking price and the offer price, a personal letter won’t make a difference, but if offers are close, some sellers may be swayed by an emotional letter.

 

Multiple bid pricing: Dangerous territory

 

“Deals collapse due to financing and trepidation – people are afraid of the market,” Sing says. “However, for buyers looking for an entry-level primary residence, there is not a lot of choice and these clients are not waiting. They will buy a home that’s not quite a teardown and doesn’t have all the bells and whistles, she says.”

Sing says pricing to attract multiple bids is dangerous in this market. “People don’t want to compete and you risk getting stuck with a lower price.”

 

Strategy for open houses

 

The strategy around open houses has changed. In a busy market, Sing says she would hold two or three open houses. Now, there aren’t as many buyers, so she may hold just one open house, reasoning that spreading a few buyers over several days makes the market look bad. Anyone who is looking – and neighbours are looking – will see what seems like a slow market and tell other people in the neighbourhood.

On the other hand, Brown says there are still a lot of buyers and open houses are important. These buyers will go to see if they like a property before they get their agent involved. “There’s not as much traffic showing up, but they are motivated buyers.”

Brown suggests holding open houses the weekend after a property is listed. After that, if it sits on the market, he says the impact of an open house is lost.

Buyers know what’s available and for how much in the neighbourhoods they’re interested in. “They’re on all the apps and know when anything new hits the market,” he says. “They know what’s going on. They are informed about what a property is worth.”

 

Pre-home inspections

 

As for pre-home inspections, Sing says people don’t always do a pre-home inspection. Sometimes having a pre-inspection means being one step closer to the deal because there’s one less condition. However, many buyers prefer to have their own inspections done anyway, so it may be a waste of money.

 

Plan B

 

Then there’s Plan B, which Brown notes that some agents are utilizing: They list a home for about a week, doing the prep work and a lot of marketing leading up to it, in hopes of getting an offer on offer night. If that doesn’t happen, the listing is terminated, the price is increased, the property is put back on the market and the whole marketing scenario starts again.

It’s expected that these properties will be on the market for several weeks. Right now, Brown says, “There are more terminations than solds.”

Plan B is common for a lot of agents, but Brown says it creates a lot of stress for everybody. The key is managing clients’ expectations.

 

From list price to search parameters: Other selling and buying tips

 

When it comes to marketing, Sing spends similar amounts regardless of the price of the property.

Of course, sellers want top-dollar, but when setting a listing price they must be realistic. “They’re not going to get what they could have at the height of Covid,” Brown says, adding clients’ decisions have to be based on what’s going on today. “Give them the information and they’ll make a decision.”

“Drive until you qualify” is still a buying strategy. Brown says buyers in the workforce (not retirees) are still leaving the city. He’s recently had clients moving to London and Kingston, Ontario. “They bought and still had money in the bank.”

When asked whether they should buy or sell first, Brown advises clients to sell first with a long closing. However, there are circumstances where clients who live in an in-demand location are gambling and buying first.

“Selling strategies have changed and sellers now have to exercise patience. Good homes in great neighbourhoods always sell. It’s just taking a bit longer. Buyers now have the luxury of negotiating price and including conditions in offers such as home inspections,” Brown says in an introduction to his latest podcast, Sold in the 6ix, about the current market.

 


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