Did I grab your attention with that headline? Headlines exist to cause a reaction, and over the past few weeks I have had 2 experiences with Agents offering on homes I had on the market for sale, where the Agent narrative mirrored was being shared in the media.
The first, was with a property I had listed for $1.7M with the comparable properties indicating the value range to be in the $2M range. We had 2 offers presented on the same evening, with one offering just over $2M. The other offer, well that is part of the topic of this post. The agent started the negotiation process with a low offer stating that the market has “tanked” and we would never get anywhere near our expectations. Her offer ended up $200,000 below the accepted price.
The second situation was with a condo we had listed for sale. We had hoped for a price around $1,000,000 and introduced the property to the market at $950,000. An agent offered full price, again suggesting that the condo was worth less than the last similar unit that sold. I tried to reason with the Buyer agent that prices are higher now than they were when the last unit sold, in Dec/22 to no avail. It ended up selling to another Buyer for $1,000,000.
We all tend to be influenced by the media. Even if you do your best to not follow the “headlines” you still hear what is being shared by media when waiting in line for a coffee, or just regular banter in the office or construction site. It is hard to get away from the messages of “doom and gloom” that sell.
Some of the headlines in the past week are similar to this one from the Toronto Star; “Toronto-Area Home Sales Plunge as Higher Interest Rates Cool Market.” There is no question the market is shifting, however by reading the weekly headlines you would think that Real Estate, well, that it is “tanking.”
Having sold Real Estate for almost 4 decades, I know what a tanking market looks like, such as the one we had in 1991 where the values dropped by 30% taking 13 years for them to return to 1989 values. That is a market that has tanked. The current market is calming down after increasing in value at a meteoric rate. The last “normal” month, meaning pre-pandemic was February 2020. The average home in Durham Region sold that month for $658,000. As of the end of last month, April/22 the average for a home in Durham Region has climbed to $1,075,000. That is an increase of $417,000 or 63%. I don’t believe anyone thought that the party would continue forever. A calm coming over Durham Region is a good change, giving Buyers an opportunity and still offering super high values for Sellers.
Who are the losers? If we look back to when the incredible run up in values began in mid-2020, and how different Agents managed the market we might see some things that relate to the 2 experiences I mentioned above.
I watched a newer Agent work with Buyers in 2020 when the market was booming. What I saw was this Agent was focusing on getting his Buyers a “deal.” I watched as time after time the Agent lost out to other Agents. The values increasing monthly meant that if a Buyer could not secure a home in a particular month and it took a few more months to finally purchase a home, they may have paid $25,000 – $50,000 more for the same property. Attempting to secure the Buyer a “deal” or a low market price, in the end, caused the Buyer to become frustrated stopping their search or in the end paying more for the same type of property. The mindset of the Agent, in this case, influenced the outcome.
What the experiences share in common is that Agents caused their Buyers to miss out on homes that the Buyers were interested in purchasing and living in or renting out.
I have experienced every form of negotiation strategy, from aggressive and threatening to non-communicative where you really are left questioning what the actual strategy is, and have found that the best, most effective way of working towards getting a sold sign on a home, either on behalf of a Buyer or Seller, is a process where respect for all parties exists, where honesty with clients is part of the negotiation and where the reality of the market is taken into consideration when navigating the selling experience.
I have never “sugar-coated” the market with the clients I work with, finding that by using current, local data and working together in a collaborative manner helps the client to go about achieving their buying or selling goals.
The upside of this market is when I have a Buyer who is interested in a property, with an Agent who believes the headlines, the Buyer I am working with usually ends up smiling, all the way the bank. Who you choose to work with matters.
If you have any questions about the process of buying or selling a home, I can be reached at lindsay@buyselllove.ca
How to choose an Oshawa, Clarington or Whitby agent in a down market.
- Interview several agents to get a “snapshot” of the current market.
- Choose an agent who has worked in a down or shifted market.
- Make sure that the agent has a written, comprehensive marketing plan.
- Check the references of the agent to see what experiences their past clients had.
- Do a google search of the agent. Check to see if they have a Google My Business page and if they have google reviews.
- Ensure the agents are local. Local agents understand the market in Durham Region better than someone living out of town.