In southeastern Manitoba, home sales have slowed. And sellers are getting frustrated.
For the last decade, our area has enjoyed a boom – a fast-paced market where buyers were tripping over themselves to secure the house they desperately wanted to buy. Prices swelled, there were competing offers, and it was a thrilling ride.
In the last year or so, something changed. We suddenly have an abundance of homes to choose from in today’s market. Buyers are now able to take their time (and they surely do), and browse the wide selection. They are no longer desperate to get whatever they can.
This is why to sell a home takes much longer than it did only a year or two ago.
Homes listed on MLS can take twice as long to sell than they would have in the past. It can take six months (or more) to sell your house in the R16 region.
If you’re a seller, this is disappointing news.
If you’re a seller in a hurry to sell, this is downright scary.
There is a way around it, but new markets call for new ways of thinking. Are you ready to adapt to the new market? If you are willing to change with the times, you’ll have an easier time. Stubborn adherence to past prices, old marketing, or even just your own perceptions though, can cause you a world of unnecessary hurt.
If you’re eager to sell, and willing to accept that the tides have changed, here’s how to change with them.
If your home is listed at 100% of market value, expect the sale to take six months or more.
Pricing at 95% of market value would bring you back up around 2-4 months.
Listing at 85% of market value may take closer to 3-8 weeks.
If your home is listed at 70% of market value though, which is what investors typically pay, you can expect a sale very quickly – in 1-3 weeks!
Then there are those who insist on listing above that value. Theirs can be a dark road.
That road often ends in the listing becoming stale, receiving low-ball offers, and then either selling for way, way, way below even market value, or being repossessed because the owners could not finance the long haul that kind of greed demands.
The bottom line is that you can control your bottom line.
You can’t force people to buy, but you can certainly sweeten the deal for them. And in a buyers’ market, that’s an essential element to selling your home.
Like much of life, it seems the home seller must choose between time or money.
Which are you willing to pay?
The process of selling your home is fraught with pitfalls.
It is made up of endless legal loopholes, multiple financial hoops, and continuous face-to-face confrontation and negotiation with both buyers and their skilled agents.
I think when people imagine selling their home they picture meeting with a nice couple in their dining room, who is able to buy their home, agrees with the price, and makes a clean offer that goes through that very week. This kind of mental picture leads many to try selling privately. I’ve talked already about how going it alone has cost people a lot of money, or even caused them to lose their house.
Every agent dreams of the smooth easy transaction too. It is far from reality though. There are hundreds of stories of people losing thousands of dollars, being tricked, or even losing their house – all because of the complicated nature of real estate transactions.
There are serious dangers to going it alone.
So just what kind of protection you get from an agent then?
An agent guards your personal safety and privacy.
Every time you allow a showing, you open your house up to strangers. What they see in your home and how they use that information are not something you or your agent can know. But your agent is on your side, and will help you protect your privacy while people are looking through your home.
We can tell you what kinds of things to put away that might tell potential buyers too much about you, your motivation for selling, your schedule, your finances, and even your home and bank security information.
An agent negotiates in ways that you can’t.
You can tell a lot about a person just from their body language, facial expressions. The words they say – and don’t say – are big clues too. Do you think that you will be able to hide your motivation from the potential buyer?
Selling your home is a highly emotional thing. We become attached to our homes, and lose the ability to look at it impartially. To you, it is your home – the place where you’ve made memories. It is the place where you put in a lot of work, made loans, and worked hard to pay them off. Buyers however, will never view your home with the same sentimentality. This sets up an immediate communication barrier between you and any potential buyer. You’ll both value the place differently, and that alone can kill negotiations.
Also, homeowners are not usually able to hide their emotions while simultaneously being friendly, fishing for necessary information, and skillfully sharing just the right number of details with the buyer.
Now imagine if this homeowner is not negotiating with a pleasant couple, but rather the buyer’s agent. The owner is now up against a skilled professional who knows all the loopholes, is not emotionally involved, and can read the seller like a menu. The homeowner is now in a losing situation.
If the seller has an agent working on their behalf though, that agent brings not only the impartiality of an outside perspective, but also the highly developed skill of negotiation with even the toughest negotiating professional.
An agent is more available than you.
In our instant access, texting, fast food society, home buyers expect a high level of availability from sellers. Buyers expect sellers to accommodate their schedules. If sellers don’t respond quickly to showing requests, potential buyers move on to the next house. Can you leave work to go show your house at any moment?
Agents can. We leave in the middle of a wedding if we have to, because we’re dedicated to this. We’re full time, all in, and always there so you don’t have to be.
Real estate is tricky, and messing up can cost big time. That’s why real estate agents exist. The whole industry was set up to protect you from yourself and from others who know more about the ins and outs than you do.
… Are you protected?
Before I was in real estate I used to frequent the same coffee shop as Jim Henderson and his friends. I knew very little about him except that he had a great sense of humor.
After I got into real estate I realized that nothing in the real estate course material gave me any indication as to the relationship between the realtor and the lawyer. I made an appointment to meet with Jim Henderson to ask him a few questions.
I arrived at Loewen Banman Henderson Legault LLP office on Main Street in Steinbach and made my way up the stairs to Jim’s office. Jim introduced me to his staff and took me into his office. We sat across from each other and he asked me how he could be of service. I believe I only asked him one question. I started with a statement such as this. ” Jim, no one has told me what the relationship is between a Real Estate Professional and a Lawyer. Could you tell me from your side of the desk what it is that you require from Me?”
Before I share with you Jim’s response there is something I want to tell you about Jim’s communication style. Can you say STRAIGHTFORWARD? Tell it like it is. No salt. Later in my career I found this very useful. On this day it took me a little by surprise. I learned things this day that has shaped how I treat other professionals in this business.
Jim looked me in the eyes in silence. No one had asked him this question before. When he opened his mouth I felt more like a councillor than a Realtor. His educational words came out more like an overdue VENT. He began with a harsh statement. “Realtors are abusive to Lawyers and Lenders!” I can still hear the agitated tone in his voice. Then he elaborated. Some points I remember clearly.
1. Real estate contracts are being written with short deadlines for possession. That creates a lot of stress for the lender and the lawyer. The Lawyer already has a stack of work on his desk. When we ask for a short possession, they have to set aside all of the other important work that they are doing to accommodate that one deal. The lawyer has to wait until he gets the mortgage documents from the lender. Lawyers do not appreciate having to be put under this much pressure for their time. They feel disrespected when short possessions are required of them. Jim mentioned to me that a two-week possession was doable. He also let me know that if I would take the time to help him understand why a possession was necessary to happen very quickly, that he most certainly was willing to make an exception and accommodate a quick close. Please leave a month from writing to possession if possible.(The Realtors that I had spoken to said the lawyer can easily get it done in a week. They do it all the time.)
2. The lawyer does not have the relationship with the seller or buyer that the Realtor does. They may not even have the contact information for the client they are to represent. Jim suggested that when we send him an offer to purchase that we also give him some information about the seller or the buyer and please, please, please also give them the contact information.
3. Be clear on the terms and conditions. Take the time to clearly write the specifics into the contract.
4. Never, ever leave conditions open up until possession!
5. Do not allow a buyer into the house after the conditions are met until possession date.
6. Don’t complain about the inconvenience of having to drive somewhere to go get a signature. You must get signatures before deadlines. You get paid very well so just take the drive and get the blasted signature.
Well, he elaborated on all the reasons why and all the risks that Realtors take. He made no bones about the fact that he did not have respect for some of the Realtors in our area. In fact, he warned me about a high producing local Realtor. He said, “____is a liar and a thief. He has always been a liar and a thief. He will always be a liar and a thief.”
Before I left the office, Jim suggested that if I ever was unclear on how to write a term or a condition in an offer that it was less work for him to coach me on how to write it than it was on correcting a sloppy offer after the fact. He offered to be of assistance. I took him up on it and he was there for me.
This is what I recently told Jim that I say to others about him.
Jim has taken the time to admonish me when I make mistakes. In fact, he’s the only man in my life who can give me shit and get away with it! I know that when Jim puts me in my place (tells me where the bear shits) it’s because he cares about me. He has tried to educate me so that I would protect myself and my buyers when I write contracts. One time he took almost a half hour to help me write out a condition on a deal. I know the difference between term, promise, and condition because Jim took the time to explain it to me. I look at contracts a different way than I would have without his training. Jim has taking me out for lunch and giving me phone calls just to encourage me and my business. He has been like a business father to me.
Jim, thank you. Thank you for all the time you have taken to help me develop in business and personally. Thank you for taking care of the people I sent your way. I am sorry you had all those crazy out of province deals from me. Sorry for all the time you took on the deals that did not close.
Oh man, I am going to miss him. R.I.P. Jim Henderson