Are we back here again? Back here, meaning bidding wars, listing below market value and holding offers?

The simple answer is yes.

In the past week over 25% of all homes listed for sale from Whitby to Clarington place for sale with the agent holding offers to a specific date. Also, during the same time 36% of all homes sold, sold for full asking or over asking price. Crazy enough, one home listed at $1,199,000 sold for $1,301,000! So the “nuttiness” has returned.

If you look backward and review the trends in normal markets, a couple of trends seem to happen every year:

1. Buyers start to buy early in the year.
2. Sellers believe that the spring market starts when the tulips begin to flower.

Having worked in markets like we are currently heading into, (a heavy Sellers’ market) I have developed some strategies to help Buyers and Sellers navigate the process of buying and selling.

For Buyers, the first item that will help obtain an acceptable offer in a challenging market is to work with a mortgage broker and getting pre-approved. Pre-approval is a term that has an exact definition and some “slang” definitions. Some Buyers feel doing an online application is a pre-approval when in fact one that can be used to show a Seller that a Buyer is truly approved is one where employment is confirmed, downpayment is proven and a full credit report is obtained. Another item is to have a deposit available and the ability to obtain a bank draft with a copy showing that once an offer becomes accepted, the deposit will be delivered immediately. Flexibility with closing dates helps strengthen an offer. Many offers are lost when the closing date a Seller views as acceptable is not offered by a Buyer.

Another winning strategy when offering on a property is to have your agent complete a current market price evaluation. In a market where a third of the homes are selling for more than asking, the asking prices can be somewhat irrelevant. The best approach is to offer what the home is worth based on comparable sales rather than using the asking price as a guideline.

With all of these strategies of how to help secure a home, something to avoid when you are searching for a home is to change jobs or take on debt. We recently had an offer accepted on a home we were selling, with the agent offering a pre-approval on behalf of the Buyer. The Buyer had not mentioned to their agent that they had changed jobs after the pre-approval was given. In the end, the Buyer was turned down by the bank due to the job change. We have also had Buyers who purchased a new car while they were shopping for a home only to be declined by their bank as their affordability was reduced due to the increased debt.

For Sellers, a few ideas to help secure a successful sale start with staging the property. In a market where the Sellers have more of an advantage, a common error is for the Seller to opt to not stage their property. (“Everything is selling, I don’t need to stage my home.”) We are seeing more and more homes listed for sale with no staging and pictures that were captured on a cell phone. Homes that show their best are the ones that gather sold signs. In a competitive market, a well-staged home not only is one that attracts multiple Buyers but one that attracts multiple Buyers willing to pay at or over market value. As simple as it sounds, flexibility when allowing showings helps to secure offers. Some homes are challenging to book appointments to view, and the facts are that the easier the homes are to view, the better the chances of finding the perfect Buyers. Along with agent showings, look at Open Houses as key marketing methods. Many of the Buyers we are seeing in our marketplace are travelling from Mississauga, Brampton and Burlington. With long travel times, weekend Open Houses are the best way of driving traffic to your home.

The next item may ruffle some feathers – when you are choosing a pricing strategy for your home, have your agent do a market scan to determine what a good strategy price is to offer the home for sale. If the trends are that homes are selling for over asking price on average, use this as a guide to price your property. I have had issues during the boom market in 2021 where a Seller decided to offer their home at market value when most of the available homes were listing below market value. What happened was, with Buyers used to Sellers listing low and selling for far more than asking prices, when a property is marketed at market value, they felt the Seller was still expecting moreover asking and avoided the home feeling the Seller’s expectations were not in line with current prices. It is always best to use the market as your guide when creating a pricing strategy.

What both Buyers and Sellers want is stability in the process of completing a move. When the strategy is different than what is currently being shown for a successful sale, the Buyers tend to get nervous and avoid a home listed for sale. It sounds a bit wonky that the acceptable way of marketing a home is to list low and expect to sell above the asking price, but if that is the current method of marketing, it is what the Buyers expect. For Sellers, the process is a bit more simplistic. The expression, “a beauty contest and a price war” has never been more accurate. Homes need to be the best they can look and priced to cause excitement.

2024 is starting off strong with some “déjà vu” of the busy boom markets we have recently seen. If you interview a dozen realtors, most will share that the markets they are most fond of, are balanced, giving Buyers and Sellers time to make solid decisions and too not rushing through the process. Alas, like Buyers disliking pricing strategies, or Sellers putting up with late-night showings, all we can do is make the best of the market we are in.

If you are interested in making a move, as either a Buyer or a Seller I can be reached at lindsay@buyselllove.ca or 905-743-5555

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