This 2-part series looks at the 11 Worst Mistakes Sellers make when selling their home . . .

So you’ve decided to sell your home. Selling a home is stressful enough. There is a lot of “behind the scenes” action taking place that you may not know about. Contrary to public perception, your listing agent does not usually attempt to sell your home to individual home buyers. That wouldn’t be a very efficient process.

Your listing agent markets and promotes your home to the other local agents who work directly with home buyers. This dramatically increases your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients…

Unless these mistakes are being made.

1. You overprice your home in an attempt to get the best price and by doing so actually end up selling for less.

If you and/or your agent have overpriced your home, fewer agents will preview your home. They are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, they will not waste their time, preferring to preview homes that are priced realistically. If you do successfully sell at an above market price, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last few months and current market conditions do not support your sales price, the house won’t appraise. You deal falls apart. You can always attempt to renegotiate the price, but only if the buyer is willing to listen. Your house could be forced “back on the market” at a lower price. Price it right the first time.

2. Hire the wrong agent believing every agent is created equal and they all do the same things.

The real estate profession is constantly changing and the best real estate professionals stay on top of those changes by continuing their education. Look at more than one agent’s presentation and consider the advantages and disadvantages of each. Inquire about “professional designations” that show they have taken additional specialized courses. Making an impulsive decision when caught up “in the moment” could be difficult to correct later. You will normally contract to list your house with the agent for a specific period of time. If you find yourself unhappy with the service you receive, you may find yourself unable to “switch” to another.

3. They wait to sell thinking the market will be better if they wait.

There is no “single” answer to this predicament but there are certainly things to consider. The housing “market” is really a series of hundreds of local “markets” made up of thousands of neighborhoods, so current market conditions vary widely from place to place. A good real estate agent will be able to tell you honestly if inventory is rising faster than buyers are appearing in your area. Consider that other would-be sellers may be holding off as well, waiting for an upturn in the market. This delayed selling may introduce still more inventory on an already sluggish market. Keep in mind that in any housing market there is always a buyer — if the price is right. One reason houses aren’t selling well in some areas is that some sellers are waiting for prices to recover and are unwilling to acknowledge that they may have to settle for a little less.

4. Don’t get the home in showing condition.

A potential buyer has made up their mind ten seconds after they step in the front door.  They were already forming an opinion as they pulled into your driveway! That really doesn’t leave too much room for fault. To achieve the greatest possible outcome, a home should always be presented at its best the first time around. Properties in prime condition are a pleasure for real estate agents to show, so they get shown more often. The more exposure a property gets, the better the chance of selling it quicker and for a higher price. Buyers pay a premium for a home that is in top-notch, move-in condition, so once you decided to sell, make sure the home is ready to be sold.

5. Do the wrong updates or upgrades to ready a house for sale.

You have to discover what needs to be done to your home. A thorough property inspection up front will help to identify problem areas. Any buyer will have a property inspection done before closing the sale. Most often, this is when they will re-negotiate the price because of any problems that may turn up in the inspection. Having your own inspection done and making all necessary repairs first removes this opportunity for the buyer to try and re-negotiate. This also reassures potential buyers that you are conscientious homeowners and will relieve some of their anxiety about buying a home.

6. Hire agents for the wrong reason.

A snap judgement isn’t good. You must do your homework! Determine if the agent is competent and the best way to do that is to check up on references. Ask for references on recent sales — check up on references of recent customers. Find out how an agent’s customers feel about their selling experience. Some agents tell you what you want to hear to get your listing but then fail to deliver. Use tough standards when selecting an agent, just as you would when hiring an attorney, a doctor, or an accountant to handle your taxes. The wrong agent will ultimately cost you in time, money and a lot of stress.

Stay tuned for Part 2, on February 3rd, 2010 . . .

I have created a new format for the information, as there is an expanded amount of information available to me now. Through the MLS, we are now able to track the number of new listings that came on the market in a given time period, which we weren’t able to do in the past.

What this has allowed me to do is to show you how the market is trending in a much more complete picture, as you will see in the table below.

This time, I am only going to provide you with one table, as the new format will mean that all new graphs will need to be created, so that will begin with the next issue of the update.

You will note that there is a new column in the chart – ‘New Listings During Period‘ – this is the piece of information that was missing, and the one that completes the picture to a truly accurate overview of how the market is going. I have also re-named some columns, for ease of understanding.

My comments appear below the chart.

As you can see from the chart, the ‘Sold Ratio‘ is determined by adding the columns for ‘Active Listings’ & ‘New Listings During Period’, thus allowing the Sold Ratio to be drawn from all properties that Buyer’s had available to them during this period. Overall, this shows that, if your house was on the market during this time period, you had a 41.2% chance of it selling. That is pretty darned good!

In fact, according to the experts, any time you have more than a 15% chance of your house selling in any given month, we are in a Seller’s Market!

You can see that there was a good amount of activity across the price ranges, however, I feel it is my duty to advise that the properties that are selling for more than the list price are not a reflection of a market gone crazy, but they are a reflection of the poor marketing tactics used by some agents. A house selling over list price does not mean that there were multiple offers, nor does it mean that the sellers got the best price for their house. In fact, some companies are currently creating an atmosphere that prevents multiple offers, not only by their pricing strategies but also by their ineffectiveness at making a property available for showings, guiding their sellers in negotiations, etc. Professional courtesy (on my part) precludes me from saying more here, however you can ask many local agents and they will explain what I am talking about.

This will be an interesting market for the next few months, for sure, as people try to get their purchases closed before the HST comes into effect. Don’t miss the boat – if you are planning on selling, give me a call today at 905-878-4444.

Here’s the latest Canadian real estate news from the Keller Williams Real Estate Research Institute. The video and SlideShare presentations contain different information, so watch both.

January 2010

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Commentary

All around signs appear to be brighter than they were this time last year – banks are profitable, confidence is up, employment is on the upswing lately, and the housing market is moving. Ottowa’s Centre for the Study of Living Standards reports shows that consumption has grown in “leaps and bounds” from $30,000* per person in 1981 to $50,000* in 2008 adjusted. That’s per person, with the average Canadian family being 2.37 people. That brings consumption per family to $118,500 for the average family.

The upcoming Olympics are expected to provide a beneficial influx of money for Canada and for Vancouver. The small business sector in British Columbia has the most optimistic outlook of all provinces in the country, most likely due to the games. The dramatic 253% increase in home sales in the Greater Vancouver area could also be partly fueled by the Olympics.

The country appears to have traveled quite a distance over the past year – from the verge of the next depression last year to what appears to be an economy that’s found its way to firmer footing.  One example is that most consumers planned on spending more this year on gifts for the holidays this year than last year.

With some concerns that the housing market has rebounded too much, too fast; it is important to keep in mind is that year-over-year increases are compared to an unusually weak year.

* Adjusted for inflation to 2009 dollars and includes government spending

Housing Market

Home Sales

Sales activity remained upbeat in November. National resale housing activity had a record-breaking month with 46,450 units trading hands. This stands in sharp contrast to weak activity seen one year ago and is 76 percent above the decade low reached in January. Low interest rates, coupled with upbeat consumer confidence, continue to bolster national sales activity.

Average Home Price

The national average home price reached new heights in November, rising 19 percent to $337,231 from the same month last year. This year-over-year increase continues to underscore the sharp rebound in Canada’s priciest markets

Inventory

Sales-to-Listings Ratio

Strong rebounds in home sales activity and average price gains are beginning to draw more sellers back to the market. New listings fell 8 percent from November 2008 but rose 5 percent on a month-over-month basis to 69,110 units. Even with the uptick in new listings, the strong increase in housing demand continues to draw down inventories. Nationally, there were four months of inventory in November, the lowest level in more than two years. The sales-to-listings ratio was 67 percent, signaling a strong seller’s market.

Mortgage Rates

Average for: 25-Year Amortization, 5-Year Term

In November, the 5-year conventional mortgage rate edged down to 5.49 percent, 1.26 percent lower than this time last year. As the Bank of Canada reiterates its commitment to hold its benchmark overnight lending rate steady at 0.25 percent until the end of the second quarter of 2010 and with the overall risk to the inflation outlook tilted slightly to the downside, it suggests that the Bank could leave rates unchanged even longer than expected.

Sources: Conference Board, The Canadian Real Estate Association, Royal Bank of Canada, Canadian Mortgage and Housing Corporation, Bank of Canada

Notable News

Bank of Canada

In its most recent meeting, the Bank of Canada said that the recovery is becoming more firmly rooted and that it expects its growth forecasts to happen as pictured. The Bank of Canada once again held firm to its commitment to keep rates at their current 0.25 percent until mid-2010.  While a strong loonie still represents some risk, it has remained slightly below the Bank’s assumption.

The Bank also heeded caution about the level of debt that consumers are taking on, reminding them to keep the long term in mind since rates will not stay low forever. Those who are taking out adjustable rate mortgages must particularly keep this in mind. As rates increase, their payment will as well.  The bank and the finance minister reminded buyers to ensure they are in a financial position to handle increases.

Source: The Financial Post

Exports Jump – Move to Trade Surplus

The Canadian economy heavily depends upon trade, particularly on exporting. Due to its close proximity, most of the exports find their way south of the border into the United States. With a hard-hit U.S. economy over the past year, demand from the United States for Canadian products dropped off. Given a better economic climate in the U.S. recently, last month’s demand was up and pushed Canada back up into positive trade surplus territory for the first time in four months.

Much of the economic activity over the past few months has come from domestic demand – Canadians are taking advantage of low interest rates and the banks that will make loans and buying Canadian products with it. So far, this has helped fuel the recovery. While it is too early to know if the increase in exports will become a trend, it is a positive sign. A sustained increase in exports would help take some of the pressure off domestic demand and add additional fuel to the fire in arriving at a truly sustainable recovery.

Source: The Financial Post

Job Postings on the Rise

Indicating that employment will likely be on the rebound over the coming months, the help-wanted index for November was up for the fourth consecutive month.

Most provinces, excluding only Newfoundland and Labrador, saw a rise in job postings. The Conference Board of Canada, the author of the index, stated that this suggests that labour markets across the country have possibly hit bottom.

November’s employment numbers overwhelmingly beat forecasts of 15,000, coming in at 79,000 new jobs. Most of those jobs were concentrated in the services sector. The rise in the help-wanted index could point to a continued trend of increasing employment throughout the country.

Source: Canwest News Service, The Conference Board of Canada

Timely Topics

Salary Freezes Expected to Thaw in 2010

According to a survey by Towers Perrin, half of the firms they interviewed froze salaries in 2009, but only 11 percent are expecting to in 2010. This is great news for your average consumer – they can now put the extra from the salary bump toward savings or spending on the many great opportunities with low interest rates, including a new home.

Senior executives, however, may need to wait a little longer as one in five are expected to continue to have their salaries frozen. It’s unclear yet if salaries for the highest earners are readjusting to a new norm or if this will be temporary.

Most salaries are expected to regain much of the ground they lost in 2009. Median salary increases are expected to be 2.5 percent.

Source: The Financial Post