It was the best of times; it was the worst of times… although regardless of what’s happening in our real estate market, the media always prefers to discuss the latter. On the way up, they tell us that the market is unaffordable for home buyers. But on the way down, the story shifts and the focus is on the trials and tribulations facing home sellers. Boy, trying to keep up can be exhausting!
But as I have seen many times throughout the course of my career, when the market starts to shift, opportunities abound. Unfortunately, these stories are seldom told.
There is always a market to buy and sell within, but where one may see volatility, I’ve always seen negotiability. Those who are less prepared and less experienced to work in a changing market can become panicked when the volume of transactions declines, and I find that there’s value to unlock here as sellers are often far more open to negotiating.
The caveat here is that buyers and sellers looking to capitalize must be prepared, and perhaps it also goes without saying, that they must have strong representation too. An experienced real estate agent is far more valuable now than ever before, and beyond managing their own clients’ expectations, a great agent will be able to manage both sides of a deal and provide further advantages to his or her clients.
Not only do I recommend working with someone experienced but someone who has your utmost trust, and whose advice you would always aim to follow. Very recently, a colleague of mine listed a condo just before the market began to slide. My colleague had already felt the rumblings of change in the marketplace and accordingly, she advised her client to sell the property as soon as possible.
After staging and marketing the client’s unit, she combed through her database and promoted the property to as many potential buyers as possible. Sure enough, after a week and a half on the market, she found the right buyer and presented a full-priced offer to her seller!
And this would have been a great success story, but unfortunately, the story doesn’t end here. The seller’s expectations were still extremely high and after his lawyer suggested that he could do better, against my colleague’s own sage advice, the seller decided to wait for a better offer. A better offer? How can you get a better offer than a full list for a property listed without a holdback on offers? It just didn’t make any sense.
The seller didn’t listen to his agent because he lacked trust, and instead, he listened to a lawyer who had zero real estate market experience. This might have more to do with greed or foolishness than trust, but either way, it was a costly mistake. Within a week, the market had shifted substantially, and the condo sat on the market. Time went on, but the seller continued to believe that there was another, similar offer, just around the corner. The property ended up sitting for another five weeks, and eventually, the seller let the property go for substantially less than he had been offered the first time around.
Beyond experience and trust, preparation is also crucial in order to be successful in a sliding market. You must strategize accordingly and manage expectations accordingly. Unlike the last few years, which saw a frenzy of competition for almost every property in the GTA, we’re now finding that sellers are likely to entertain conditional offers. This is leverage for buyers we haven’t seen in a long time, but even the best deals require a solid selling strategy too. Unless, of course, you’re okay with being left owning multiple properties!
I’ve always advised my clients to sell first in a sliding market as the cash on hand provides even more leverage when negotiating their next purchase. Alternatively, I’ve also submitted an offer to purchase which is conditional upon the sale of their existing property, but it’s important to remember that in a declining market, the sooner you sell, the better.
Don’t let past expectations get the better of you, and don’t chase the market down! Nobody wants to catch a falling knife.
There is without a doubt more opportunity in the market today than I have seen in the last ten years, but the right representation can make all the difference. This is only one of the reasons I decided to join forces with the Toronto Realty Group team at Bosley Real Estate – I truly believe the combined knowledge and level of service we bring to our clients is unparalleled within the industry.
Never one to shy away from a potential challenge, I, for one, am really looking forward to working in this new, ‘changed,’ balanced market that lies ahead.
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