Last week I shared some tips for home buyers to win their dream house in what is turning out to be one of the hottest real estate markets in the world, despite a global recession. We’ve been looking for a house for about a month now and we’re running into some pretty odd situations when it comes to dealing with sellers. Here are five tips for those of you trying to woo the hundreds of people traipsing through your house every day to sign on the dotted line.
- Be honest about your house’s flaws. This might seem counter intuitive, but when you disclose right up front that the roof needs work or the electrical needs updating, buyers don’t feel like you’re trying to scam them. Your agent will be able to tell you what you should disclose right up front and what should be revealed through an inspection. Generally, you don’t want buyers to pay $400 on a home inspection to find out it needs $100k in major updating. That will leave buyers a little pissed.
- Make it easy for buyers to see your home. Technically, you can put any restriction you want on showing your home but, in this market, when people are buying houses in hours, you should make it as easy as possible. We’re trying to see a house today that requires 24 hours notice because the couple has so many rescue animals in their backyard they have to make arrangements before the agent can show it. Apparently there are eight cats, two dogs, a barn owl, and a falcon. They’d better hope another house―that I can see in an hour!!―doesn’t catch my attention.
- Don’t hang around while potential buyers are looking at your house. And don’t point out quaint little details and trail after the buyers telling them what a great deal it is. Buyers want to be able to talk about the things they love and hate and you cramp their style when you hover. One elderly gentleman followed us through the house but lingered around corners so he could hear what we were saying. It was offputting, to say the least. And sitting in the backyard isn’t cool either. Go get a coffee and let your agent earn her commission.
- Don’t over- or under price your house. Here’s what’s happening in the Toronto market now: people know that it’s super hot and competitive, so in order to create “buzz” and generate “action”, sellers are listing their houses WAY below the house’s market value. We all know they’re doing it, and we know why they’re doing it. So when a renovated house, in a hot neighbourhood, with parking, across from a park, is listed at $559k, we know it’s going to go in a bidding war north of $700k. But, dear sellers, here’s what happens: people who can afford $559 will come but they won’t be able to follow through because that’s no where near the real value of the home and now the owners have pissed off a whole segment of the buyers’ market. Buyers know you’re doing this and will stay away because they’re tired of bidding wars. We now can tell what the real value of a house is and if it’s priced way under, we don’t even bother to look, even though we can afford to play with the price, because we just can’t be bothered with a bidding war. Let’s say the owners are hoping to get over $700. They should list at $699k. In this market, you’re still going to get people looking at your house, because inventory is so low, but you’re going to get the people who can actually afford to pay the asking and go north if it goes to multiple offers.
- Use an agent! Is it just me, or do other people get scared off by a house that’s being sold privately? It immediately gets my spidey sense tingling that something is just not right. Or, even if they are just trying to save the commission, it makes me question what else they’ll do to save money and makes me question whether they spent money on their home as needed. There’s a reason why many private sales take a long time to sell: usually the homes are overpriced or the owner is inflexible. You have the right to sell your home privately, but the majority of buyers will stay away.
I’m really excited about the house we’re seeing tonight. I think they’ve priced it right and, if everything looks good, we’ll be ready to “pull the trigger.” In the meantime, happy house hunting/selling!
Previously on Moving Mayhem: 6 Tips to Buying in a Hot Market
Reni Walker (AKA Scotch Mommy on slice.ca) shares her moving mayhem on Wednesdays.