An issue that I’ve heard discussed a fair amount in the past few months is that of used homes (referred to more politely in the business as “resale properties”) versus new ones. More specifically, the issue of differing levels of maintenance thereof and the expectations of potential buyers. Generally the process goes like this; the buyer finds a home they believe to be acceptable for their needs and inserts some clauses into their offer which contain conditions precedent to their ratifying the deal (commonly referred to as the ‘subjects’). We’ll deal here with the “subject to inspection” clause. When assisting buyers all Realtors recommend the paramount importance of the insertion of this “subject”. What should accompany that inclusion is a frank discussion of what is likely to be found by the inspector.
It is import to remember that a “used” property will seldom be perfect and that the price agreed upon by the buyer and seller takes into consideration a ‘reasonable’ level of maintenance of the home and the chattels (appliances). For example, a 16 year old furnace (while maybe still serviceable) may result in a lower agreed upon purchase price than a similar home where that item was replaced a year or so ago. Likewise with the roof, the drainage system, plumbing etc. Enter the inspector – who undertakes their task and presents the buyer with the list of concerns and recommendations. Incidentally it is strongly advised that, if possible, the buyer meet the inspector for a ‘walk through’ so that questions can be asked and the significance (and likely costs) can be explored? The buyer then meets with their Realtor and does one of the following things i) removes that condition (is satisfied) ii) decides not to proceed with buying the home iii) agrees to remove the condition after a renegotiated purchase price is accepted.
Many folk understand that the additional cost (GST etc) of new property can be avoided by buying resale property and remediating the concerns themselves. Remember though that there is no warranty given by the seller with resale property (except possible recourse under any ‘misrepresentation’ contained in the seller’s Property Disclosure Statement). Alas, too, there are occasions where a buyer may wish to negotiate a reduction in the agreed upon price without a strong basis for complaint. The seller’s decision may be to decline such a request and risk the buyer walking away. One piece of advice I often give to my clients is to get some level of inspection on the property themselves prior to putting the home on the market. Forewarned is forearmed.
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And now to our August figures for 2014 in comparison to 2013. North Van detached homes sold are up 18% from last year, attached (t/hses) up from last year by 9% and apartments up 20%. The detached average price is up 9% and inventory is down by 20% from 2013. Average prices up 3%(t/hses) and up 2% for (apts). Inventory (t/hses) 110 vs.121, down from August 31st 2013 and (apt) virtually unchanged from last year for the same date.
In West Van, detached number of sales YTD for 2014 is up by 14% from August 31st 2013. Average price of what has sold is up 8% from last year and inventory now down 8% from August 31st 2013. On the condo side – attached (t/hses) sold 2014 are down from 2013 at 51 vs. 60 units with a 2% decrease in average price. Active listings are down year over year from August 31st 2013 by 4% (45 vs. 47). Apartments reflect 118 sold in 2014 vs. 107 in 2013 with average price down 2% from August 31st 2013 and active listings down 1% from August 31st 2013. Both jurisdictions continue evidencing healthy demand. Inventory is generally down.
Pricing your home correctly is critical to a successful sale as it will help you sell for the highest price, in the shortest time.
Figuring out the best listing price involves comparing similar homes that have recently sold while taking past, present and future local market trends into account.
It is normal to have your own personal opinion of what your home’s worth, but it’s important to be realistic and unbiased. In the end, the market will determine your home’s true value.
There’s always a flurry of activity when a new property is listed on the market but if the price is too high, it will quickly become stale and there won’t be any incentive for buyers to make a swift, strong offer. Worse yet, buyers may well start to wonder what’s wrong with it.
Overpricing your property will also help your competition as buyers will see other homes in your area as much better deals since they’re less expensive. If your home is priced at fair market value, those same buyers will consider your home more seriously.
Having your property sit on the market is also inconvenient as you’ll constantly have to keep it in a show-ready state. Furthermore, carrying costs such as mortgage interest, insurance, taxes and utilities will quickly add up if you allowed yourself to get stuck owning two homes at once.
Pricing a home is part art and part science. Market factors such as the economy, time of year and interest rates can all make a huge difference. Your home only gets one chance to make a great first impression so it’s critical to enlist the services of a professional to help you get things done properly from start to finish. An experienced Realtor has seen property marketing done the right way and many homes marketed in the wrong way. It is that experience that is of most value to you.