Another Quick Life Lesson Zinger Here From The Real-Life Real Estate Trenches.
In a sellers’ market, generally defined as when too few properties are for sale for the number of buyers in the same market (thereby providing the seller the advantage in the transaction), properties listed for sale don’t last long before being scooped up. Often, they go for more than asking simply on account of how much pent up demand there is; when someone needs a home, they really need it.
How To Sound Intelligent At Parties.
Now, not all properties are created equal. Sounds obvious but in common parlance, rarely do people distinguish between types of properties when asking “How’s the real estate market?” In actual fact, the more accurate question might be, for example, “How’s the residential free-hold (i.e. stand-alone home) market in the $600-800k range?”. See, it’s all about being really rather more specific; the lower end (i.e. $500k and under) may be turning over far more quickly than the higher end (i.e. $1M+) during the same period of time. Paradoxically, you can very much have a scenario of “A Tale of Two Cities” in the same city.
If You’re A Seller, Don’t Make This Mistake.
Please don’t make the mistake of assuming what you’re looking to sell will go for as much over asking, or as quickly, as a different type of property, in a different price bracket, in a different location. Again, sounds obvious but giddiness (i.e. delusional thinking) can quickly set in once people start seeing dollar signs; beware of the Big Green Monster. Don’t let it cloud your judgement.
While greed might have worked as an approach to life for Gordon, it isn’t always good. If you’ve got a firm offer in hand (with no conditions) that sets a new record for your neighbourhood (let alone having doubled your money in under four years of ownership) ACCEPT THE OFFER. How can you justify wanting more at that point?!
If You’ve Done Your Homework, Value Your Time And Go For The Sure Thing.
Which brings us neatly to the idea of selling your property privately (i.e. without it going to market). Such a scenario can be termed an ‘exclusive listing’, meaning it isn’t yet featured on the online MLS platform. There are often considerable advantages to this approach.
First, if your Realtor can find you a buyer, it should (usually) save the seller on the total amount of commission owing – which means you don’t have to sell the property for as much to end up with the same amount in your pocket at the end of the day. Second, convenience plays a huge factor as the seller won’t need to vacate their property multiple times (and at last minute) to accommodate multiple showing requests (often, on the same day). Moreover, with wave after wave of COVID, the fewer people trapesing through your property is probably a good thing, if it can be avoided. Indeed, there is incalculable value in diminishing life disruption and lowering exposure to risk. Third, not having to keep the property in a constant state of pristine cleanliness and order can be a tremendous stress eliminated.
Fourth, often in exclusive listing scenarios, the irrevocable periods provided with offers (i.e. how long an offer is good for before it expires) can more easily be negotiated to be longer; if you start to get into multiple bid and bully offer scenarios, the irrevocable periods may be as short as 2-4 hours (down from perhaps as long as 24 hours). Remember, the longer the irrevocable period, the longer you, as the seller, have time to decide whether to accept, reject or counter the offer in hand. Talk about putting yourself in an otherwise avoidable distressing situation of having to make a decision in a hurry.
In The End…
Consider that a seller does not always stand to obtain a higher selling price by taking the gamble and going to market. If the seller and their Realtor have performed their due diligence and considered true comparables (i.e. looked at the ‘comps’), a realistic selling price range should already have been determined. If you can get an offer privately that meets or exceeds this, why not take it and save time and effort?
One last point. As we’ve experienced a sellers’ market for several years now, someone selling after owning for even only 2-3 years will be pleasantly surprised by how much more they will get for their property than what they paid. This usually translates into $100k+ in instant equity, even for a smaller property.
My advice: take this money and run; don’t lose out gambling trying to get another $5-$10k by forgoing a sure offer (with less commission owing and that might not be available later in the process); after all, since when is making $100k not enough in 3 years?!
Beware of that Green Monster and remember that a bird in the hand is worth two in the bush.
