What Are Market Conditions?
The real estate market is always changing. It helps to understand how market conditions can affect your position as a buyer. The main factors that affect market value are location, property, condition of home, comparable properties, market conditions and the economy.
No matter the condition or desirability of your home, its value will be affected by current market conditions. As your Real Estate Professional I can provide you with current real estate market conditions and explain their impact.
The supply of homes exceeds the number of buyers (supply is greater than demand). In this market, prices tend to drop and the homes stay on the market longer. Thus your home may take longer to sell and you will have less negotiating power in terms of the selling price. Fortunately, you will be in the driver’s seat when making an offer on your next home.
The number of buyers exceeds the number of homes on the market (demand greater than supply). In this market, prices are increasing and homes sell quickly. As a seller, you will probably have more negotiating power and obtain a higher selling price for your property. Unfortunately, you will be on the other side of the fence when purchasing your next home.
The number of homes on the market is equal to the number of buyers (supply equals demand). In this market, prices are stable and homes sell within a reasonable period of time, if properly priced. It is a calm atmosphere with buyers having a satisfactory number of homes from which to choose.
Setting a Price
The single most important decision you will make with your Real Estate Professional is determining the right asking price for your property.
Recommended listing prices are based on historical sales and current market conditions. A house that is priced 10% over its actual market value is many times less likely to sell in the initial 30 days of marketing than one priced within 5% of its true value. Not only will an over-priced home take longer to sell, it is also likely to sell for less than its actual value. This is due to the “discount” often associated with properties that have been on the market for a longer than average time.
Once you’ve achieved a realistic sales price, you can count on your property being professionally marketed and promoted to bring more buyers to your door. You can also expect to sell your home for the best possible price in the least amount of time.
Benefits of Pricing Right
- Your property sells faster, because it is exposed to more qualified buyers.
- Your home doesn’t lose its “marketability.”
- The closer to market value, the higher the offers.
- A well-priced property can generate competing offers.
- Other Real Estate Professionals will be enthusiastic about presenting your property to buyers.
The Value of Your Home
The market ultimately determines the true value of your property.
Before you compare your home to similar properties and establish a competitive list price, the following points should be considered:
- Community Amenities
- Buyer Supply
- Financing Options
Getting to Know Your Market
A comparative market analysis is an indicator of what today’s buyers are willing to pay for a home. It compares the market activity of homes similar to yours in your neighborhood. Those that have recently sold represent what buyers are willing to pay. The homes currently listed for sale represent the price sellers hope to obtain. And those listings that have expired were generally overpriced or poorly marketed.
As your Real Estate Professional, I will prepare a comparative market analysis for your home based on the most current market information. Together we will establish the proper list price for your home.
Overpricing Your Home
Many sellers believe that if they price their home high initially, they can lower it later.
Often, when a home is priced too high, it experiences little activity. Gradually the price will come down to market value, but by that time it’s been for sale too long and some buyers will be wary and reject the property.
On occasion, the price is dropped below the market value because the seller runs out of time. The property sells for less than it’s worth.
Missing the Right Buyer
You may think that interested buyers “can always make an offer,” but if the home is overpriced, potential buyers looking in a lower price range will never see it.
Those who can afford a home at your asking price will soon recognize that they can get a better value elsewhere.
As soon as a home comes on the market, there is a flurry of activity surrounding it. This is a crucial time when Real Estate Professionals and potential buyers sit up and take notice.
If the home is overpriced, it doesn’t take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.
Preparing a Marketing Plan
Your property is not something you sell everyday. In fact, for many people it is their largest asset. A house is very complex to market and the process needs to be well organized. To do the job properly a plan is needed.
As your Real Estate Professional, I will prepare a personalized plan for you containing all activities intended to market your property. Your property will be aggressively promoted via this Internet site, Chestnut Park’s website, other Real Estate Professionals, the Muskoka-Haliburton Real Estate Board MLS® services (unless it’s an Exclusive listing), social network sites, local newspaper advertising, various Real Estate magazines, plus mailings to potential buyers in your area.
The first formal step in marketing your property is to enter into a Listing Agreement – a contract that commits me as your Real Estate Professional to actively market your home for a specified period of time. It also commits you to a pre-established marketing fee that is to be paid upon the successful closing of the sale.
We may also require the following documents:
- Plan of Survey or Location Certificate
A Survey of your property which outlines the lot size and location of buildings as well as details of encroachments from neighbouring properties. This may be required in certain areas to complete the sale of your home. Your legal professional may recommend a survey, especially if significant changes have been made to your property.
- Property Tax Receipts
Most Listing Agreements require that the current annual property tax assessments be shown.
- Mortgage Verification
Few homeowners know the exact balance of their mortgage as it is paid down. You will be asked to authorize your mortgage lender to provide the figures required.
- Deed or Title Search
This document is a legal description of your property and the proof that you own it.
- Other Documentation
In some instances, it may help the sale of your property if you can provide prospective buyers with information on such items as annual heating, electrical, and water expenses, as well as any recent home improvement costs.
FINTRAC Forms: Financial Transactions and Reports Analysis Centre of Canada or (FINTRAC) collects, analyzes and discloses financial information and intelligence on suspected money laundering and terrorist financing activities. It was created as part of a Canadian government initiative to fight money laundering and terrorist financing, both domestically and internationally. Businesses and industries who must report FINTRAC are required to “know their clients” and asking for ID is one way to do that.
Under PCMLTFA you are required to provide valid identification such as a birth certificate, driver’s license, passport or similar type of document.
Show Your Home
First impressions are lasting impressions. You will want to make sure the buyers looking at your home are left with the best possible impression. As your Real Estate Professional, I can help you achieve that goal.
Exterior of Your Home
- House in good repair
- House number easy to read
- Eaves troughs, down spouts and soffits in good repair
- Garage/car port clean and tidy
- Litter picked up
- Cracked or broken window panes replaced
- Lawns and hedges cut and trimmed, garden weeded and edged
- Walks shoveled and salted
- Boot tray inside front door
- Doorbell and door hardware in good repair
- Porch and foyer clean and tidy
Interior of Your Home
- Chipped plaster and paint touched-up and replaced
- Doors and cupboards properly closed
- Leaky taps and toilets repaired
- Burned out light bulbs replaced
- Squeaky doors oiled
- Mirrors, fixtures, and taps cleaned and polished
- Seals around tubs and basins in good repair
- Floors cleaned, garbage containers empty
- Inside of closets and cupboards neat and tidy
- Appliances cleaned
- Countertops neat and polished
- All lights turned on
- Air conditioner turned on in warm weather
- Fresh air in house
- Fireplace lit in cooler weather
- Halls and stairs cleaned
- Drapes opened during daylight
- Carpets freshly vacuumed
- Fresh flowers in various rooms
- Jewelry and valuables locked safely away or taken with you
- Valuable property, such as objects of art, vases and figurines out of reach, out of sight, or locked away
- Pets absent, where possible, or contained during the showing, and litter boxes clean
Elements of an Offer
There are six key components to the elements of an offer. They are:
Depending on the local market conditions and information provided by me, your Real Estate Professional, the price you offer may be different from the seller’s asking price.
Your deposit shows good faith and that you are serious about buying the home. It is held in trust by the listing brokerage if the offer is accepted and applied against the selling price on closing. The deposit is usually between 5% and 10% of the sale price or more depending on the circumstances and closing date.
Includes the total price offered and the financing details. You arrange your own financing or ask to assume the seller’s mortgage, especially if it has an attractive interest rate.
There are a wide variety of conditions that you can place in your offer. It is extremely common to make your offer conditional on a home inspection by a certified home inspector and conditional on bank financing. If you own another property, your offer may also be subject to you being able to sell your property.
- Inclusions & Exclusions
These might include or exclude appliances and certain light fixtures or decorative items, such as window coverings or mirrors. If a “chattel” requires a screwdriver, hammer or other tool to be removed and the Seller intends on taking it with them, it should be noted under exclusions.
- Closing or Possession Date
It is usually (but not always) the date people move in to their “new” home as well. It is the date that title to the property and keys are handed over to you, the Purchaser, in exchange for funds. The transaction is finalized with the services of your lawyer and the Seller’s lawyer.