STRONG SELLERS MARKET CONTINUES FOR 2018... CHANGES YOU MAY NOT BE AWARE OF...
PREPARED BY PHILIPPA BERG, ROYAL LEPAGE COMOX VALLEY
We said “they” were coming and they have. Mainland buyers cashing in while recognizing that the lifestyle and affordable real estate in the Comox Valley is an opportunity not to be missed. This influx of new Buyers to the market combined with the scarcity of listings continues to drive prices up to new levels. New benchmarks are being set every day and now the rules of real estate will throw ambiguity and confusion further to the mix. This new legislation in March 2018 from the BC Superintendent of Real estate will restrict the public’s right to choose their own Real Estate Representation. The changes coming down the pipeline that have been promoted as “protecting consumers” and “eradicating limited dual agency” could have significant backlash to the consumer on both the buying and selling side. Rights of the consumer veiled under the “small print” of what is to come. On a personal note I have always acted in the best interests of my clients and held a professional standard of care to be loyal, avoiding conflict of interest, full disclosure and kept all confidences. I take the time to explain and educate my clients and my working relationships are based on trust and respect built over time. The changes to come will potentially erode some of those relationships with new policy. Change is inevitable but a smart, thought out and less reactionary approach would have been better for the consumer. As more information becomes available I will outline the changes and how to best navigate in your best interests while continuing to represent you.
SNAPSHOT OF THE MARKET TO PUT THINGS INTO PERSPECTIVE
If you purchased a single family home in 2015 the average selling price was $363,631 and the average condo was $173,330. Today the average price is $491,428 for single family homes and $238,624 for a condo.
The number of condo sales has jumped from 205 sales in 2016 to 340 in 2017. This is a reflection of equity rich real estate owners reinvesting their appreciation into rental properties. Affordable housing remains a problem and rents are high giving investors a solid return.
Comox Valley Annual Average Home Sales
Multiple offer are the new norm. Keeping in mind that multiple offers come in various types.. The Subject free cash offer- no subject conditions to purchase, no financing required = Firm Sale. The sold sign can go up that day. Other offers come in with a few conditions to purchase, perhaps with a higher price. Each offer can be very different and range in price and the types of conditions drastically. As a Buyer it is impossible to predict what the competition is going to offer. It comes down to... a property is worth what a buyer is willing to pay in this market. As your Realtor I can advise you on the current inventory, sales history of similar properties, current market conditions, property highlights and potential issues for resale and value. I can recommend reputable inspectors, draft an offer that protects you and negotiate on your behalf. When it comes down to strategy for making an offer I can share my specific market knowledge of 14 years and expertise.
WHAT DOES THIS MEAN TO YOU AS A BUYER?
It is like dating… be prepared to put the work in, face rejection and put your best foot forward…
Be prepared. Be prepared with your financing secured. Have your bank or mortgage broker on speed dial and know the $$ amount you can comfortably purchase given the new lending rules that came out at the end of last year. Interest rates have already gone up this year. Know how many days your lender will require to secure “Firm” financing if this is a necessary condition to purchase.
Have your deposit ready to go.
Be flexible to view the new listing as soon as you are notified of it. Be prepared to be looking a property amongst other eager buyers and agents. Keep your opinions and questions whilst among the competition quiet. You may be their competition.
Read and approve as many of the documents in advance of an offer as possible. Have your lawyer on speed dial to review title searches, site surveysandambiguous strata clauses.
Keep a calm head. Always consider the #1 Rule of Real Estate- Location Location Location.
TIPS FOR PREPARING AN OFFER
The price is always a main factor but not always. The dates for possession along with the date for subject removal (if any), along with the number of conditions to purchase ( if any) and the size and receipt of deposit can be important factors. The fewer the conditions and if an offer is subject free the sold sign can go up upon acceptance. The Seller will decide what is most important to them and can only work with one offer at a time. That offer is then accepted or countered. Where deadlines are tight a Seller or Buyer may ask for an extension to think about it. Remember,any changes to a contract open it up. Important to understand the implications of this.
WHAT DOES ALL OF THIS MEAN TO YOU AS A SELLER?
As a Seller get ready to put on your dancing shoes as the market is likely very different from when you last purchased or sold. A celebration is in the near future as YOU are in the driver’s seat. If you are making a move within the community remember its all relative. If you are moving out of the valley you may have more buying power depending on where you are going.
Pricing is rather ambiguous in this market. Important to note that proper pricing remains important. Too high could potentially miss serious buyers with pen and cheque book in hand. If the decision is made to “Test the waters” on price be prepared to reduce the price within a week or two if no interest. The market will tell you. Pricing a property is based on my experience, market knowledge and the saleability of a property. Depending on buyer demand some properties are not necessarily bound to attain a multiple offer.
MY PERSONAL SELLING STRATEGY
1. Preparation in advance of a listing hitting the MLS (Realtor.ca) imperative. Much of the work is done prior to a property appearing on the MLS.
2. Property “show ready” condition to appeal to the greatest number of prospective buyers. I will provide staging advise and a professional cleaner to put those finishing touches where required to make the property shine.
3. Professional photography, professional floor plan, complete package of strata documents if applicable, title search, survey, property disclosure, well & septic permits & reports, insurance docs, warranty certificates, hydro bills.. All of these items prepared in advance and ready to upload to the mls right away for prospective buyers. First impressions on the mls are important as buyers wait anxiously for new listings to appear on their PCS.
4. Flexibility of showings- with appropriate pricing showing requests will be fast and furious.
5. Social media blitz, advertising, Realtor Caravan tour… many more features. Contact me for a copy of my complete Marketing Program.
Yes it would be lovely to tell your neighbours that you got an offer on Day 1. Would it not be even better to allow some market exposure and increase the odds of a multiple offer and a higher price? Perhaps one of those mainland buyers with deep pockets would like an opportunity to view your home in person or even have the time to see it online? Some Agents may not have the time to show a new listing or coordinate with a buyers work schedule on Day 1. In my experience I find that giving a property adequate market exposure pays off and 3-7 days is the magic number. Some buyers may of course decide not to compete but with such a shortage of offers “tis the nature of the market”. I also believe that Buyers feel less frenzied and write cleaner offers that are less likely to collapse the next day with buyers remorse.
WHAT HAPPENS IF I HAVE A BUYER FOR YOUR LISTING?
I will refer that buyer to a colleague I trust and respect to prepare the offer. As of March 15, 2018 there are new regulations coming into effect. There are many details that have not been clarified by the Superintendent of Real estate to date. I will be writing a separate blog regarding the changes.
Stay tuned for monthly updates on the new legislation impacting you as a Consumer, the monthly stats, opportunities to invest and useful tips for navigating this fast paced Sellers market.