The real estate market has shifted from an intense seller's market to a healthier and more balanced market. Buyers don’t feel the urgency of rising home prices so they scrutinize properties more carefully and take longer to make decisions. If you're trying to sell your house and don't get an acceptable offer, you may opt to take your house off the market and try again at a later date. But what if you’ve already bought another house or, if for whatever reason, you just have to sell? Does your agent have the skills to get you the best price or even SELL your house in a balanced or declining market?
Since 1996 Toronto has experienced a booming real estate market which didn't necessarily test a listing agent's sales skills. Agents would list a house on the multiple listing system (MLS) and, as long as it was reasonably priced, another agent would most likely sell it within a few days or weeks at the most. This method usually procured a sale, but it didn't guarantee the highest price possible. Getting the highest price requires more skill and effort by your listing agent beyond offering your house on MLS, even in a seller's market.
So what set of skills does your listing agent need in order to sell your house at the highest price possible in a balanced or declining market?
When Valerie and I started selling real estate in 1989, in a downward spiraling market, we sold houses through sheer determination, grit and hard work. At that time, we didn’t have the sophisticated and far reaching tools to expose our properties to the market such as Internet, YouTube and social media. These new media have all but eliminated the face to face hard selling that is more critical to clinching the sale in a declining market. An agent who has experienced a down market can draw on the knowledge and skills acquired in tougher times. Addressing objections, persuading buyers, being persistent, working hard and being patient all while maintaining a positive attitude is key in a changing market.
Your listing agent has to understand the complexities of declining markets and be able to offer you advice relevant to the changing times. Should I buy first or sell first? How long will it take to sell my house? Should I lower the asking price or is it too soon? Should I sell my house as is or improve it in a changing market? If I do make improvements, will I get my money back? Should I accept an offer or hold out for a potentially higher one? The strategies required to successfully achieve your goals in a balanced or declining market are very different to the ones used in a seller's market.
Here are a couple of examples of what can go wrong in a changing market.
We represented buyers this fall and submitted an offer on a property that was rejected by the seller even though he had to sell and hence didn't have the option to take his house off the market. The listing agent advised the seller there would be a higher offer around the corner. We told them the market was changing and the seller may not, in the near future, get the price our buyer was offering - but to no avail. Weeks later this property sold but for much less than the price our clients offered. The listing agent in this case was clearly not in tune with the changing market and his advice cost the seller many thousands of dollars.
Another example is a couple who bought a house at the beginning of October with an early January closing. Their agent was going on vacation and recommended postponing listing their house until he returned. It has now been on the market a few weeks and the sellers, aware of the changing market, are panicked. An astute listing agent would never have recommended postponing listing the house by a few weeks in any market. We advise our clients to start getting the house ready before we begin the search process so they will be ready to list their house immediately after we finalize their purchase. Our past experience reminds us how quickly a market can turn, as happened in this case, resulting in dire consequences to a seller who has bought another house.
In a declining market your agent has to use all the tools in their arsenal to find a buyer as quickly as possible. An important edge is the ability to appeal to a buyer's emotions by providing community level content to entice potential buyers on the benefits of living within the community. Everybody wants to belong and your agent should know what cultural amenities and community events will add flavor and a sense of belonging to the potential buyer. What are the best schools and what do they offer? What do people do for fun in the community? What are the hot spots? Any agent can provide statistics about what is for sale and what has sold but, to have an edge over your competition, your agent has to appeal to the buyers’ emotions by selling them on your community as well as your house.
It always astounds me how casually the consumer often selects a listing agent. They may have met the agent for the first time at an open house or the agent may have cold called their home. How can you possibly know anything about this person's skill level or ethics through a chance meeting? I have come across many great listing agents and many incompetent ones too. Unfortunately the consumer doesn’t get to figure out the bad ones until after they have signed on the dotted line and the work to sell the house begins.
So do your due diligence before hiring an agent. Don't use an agent just because you are friends, don't use an agent that only works part time, don't be influenced by discounted commissions or the lure of an over inflated appraisal for your house. Ask yourself "do I trust this agent and does this person have the experience to do the best job in this market?" In the end, using the right listing agent will spare you countless sleepless nights worrying about your unsold house in a declining or balanced real estate market.