North to south, BC markets are at different stages of a market correction. The low interest rate buying frenzy is behind us as prices fall in line with realistic lender assessments and approvals. Careful consideration, in-depth vetting and negotiation has returned to the real estate process.
A welcomed change for buyers who could not find a place to call home, as they were out priced and out bid for the last two years. If you are a buyer in play or have a current listing and will need to re-enter the market quickly, you should be securing mortgage quotes out 160 days if possible. With three more overnight interest rate increases foretold before the end of 2022 locking down a great rate now ahead of mid July rate hike number three is advised.
It is hard to predict when or if residential markets will ever transition into a traditional buyers market. BC is spectacular, millions of people want to live here and build a life here. 98% of property owners accepted their 2021 property assessments without filing an appeal, showing more than the majority agree with the increase in valuation of their investment.
Statistically, demand for houses and property should never wane, as our population has and will continue to outpace our ability to build affordable homes.
The CMHC published a reality check report on June 23, 2022 titled; Canada’s Housing Supply Shortages: Estimating what’s needed to restore affordability in Canadian provinces by 2030.
After developing economic projections to 2030, and using current trends in housing growth the CMHC has stated, “If we stay on our current trajectory, there will be more housing supply — but not enough to address affordability.” By their calculations, demand will still have Canada needing an additional 3.5 million units to restore housing affordability, 44% of those additional units will be needed in British Columbia.
That said, houses are not selling themselves anymore, you need an experienced realtor and proven marketing strategy that will garner attention, attract qualified offers and close near asking price. Until they know where inflation, the frail economy and interest rate hikes will leave them, many buyers are just watchers. You need to go the extra mile and do these three things extremely well to sell your property faster and for a higher return on investment during market correction.
#1 Correctly Price Your Listing.
Correct pricing is key to attracting qualified interest. Price reductions are being posted daily right now, as sellers need to be realistic and in line with lenders assessments to warrant qualified inquiries. Buyers are having to stretch their budgets to extremes to qualify for median priced homes, and banks and lenders have to assess and accept both the buyers financial snapshot and your properties value to determine if financing will be approved.
Lenders are now coming back to buyers with approvals 20 to 60K below the original mortgage ask, buyers can pony up the difference or seek a 2nd private lend if they qualify to purchase at the accepted offer price. If the buyer cannot locate approved financing the deal falls through and the seller has now wasted anywhere from 2- 6 weeks off market while they waited, and did not complete. The days of summer are already getting shorter, if you need to move now, you need to be priced competitively.
#2. Have All Your Support Documentation
An accurate and detailed online listing write up with all the supporting documentation is a catalyst to sell your home faster and closer to the asking price. Documents make it real, they let a buyer know that what they read in your listing is accurate and true. The decision to make an offer and follow through with vetting and inspections depends on how confident a buyer is that the property is being truthfully represented. Mortgage lenders also depend on documentation to determine if a property is factually represented in order to approve mortgages for buyers. Having all your documents scanned and digitized so when a buyer is vetting your listing, your realtor will already have a good copy on file to quickly email a subject removing response.
Accuracy of representation and details are extremely important when selling property, not unlike buying a used vehicle, if the owner has a log book with all the receipts of maintenance and repairs you feel allot better about buying that vehicle than one that has no records or recorded history. Documents matter!
#3. Yes, You Need To Stage Your Home
Staging has a direct effect on sale price and time on market, so why wouldn’t you take the time and small costs associated with staging and use them to your advantage. Staging is an important tool because a well-staged home looks better in photographs and your online property profile is what most buyers see first. A well staged home also looks better in person, as it can be hard for buyers to imagine themselves living in a home filled with personal items, photographs, full cupboards and storage spaces. According to the 2021 Profile of Home Staging, a report from the National Association of Realtors (NAR), found that 82% of buyers’ agents say staging makes it easier for buyers to visualize a property as their future home, which can help the home sell faster.
Buyers viewing a property will linger in a staged home longer and unless you are a minimalist to begin with, it is advised to rent a secure storage locker and store 40-60% of your personal belongings while your home is on market. If you are selling, you are moving anyway, and taking this step to partially pack and stage will helps you when you can accept an offer for more money to meet a quick possession date.
A home or property that is staged with no personal items looks larger, brighter, cleaner, and buyer’s can visualize what furniture of theirs will fit in what spaces. Nothing turns off a potential buyer like a home with other peoples lives on display, jammed packed cupboards, stuffed full unorganized closets and garages that appear to not have enough space for your stuff – let alone a new owner.
In summation, there are people who have to move this summer for countless reasons, they will be looking for an affordable property that has been well taken care of that they can complete on quickly. Your home can be one of this summers quickly closed sales!
Get your documents in order, price your listing at a competitive price, get your property staged to create a knock out online property profile that will draw qualified offers, and be prepared to be flexible and negotiate. Doing these three things will help your listing and property stand out from the competition and have a better chance of finding the right buyer by summer end.
Freddy & Linda Marks, 3A®Group RE/MAX Nyda Realty