I asked readers for input on what they thought it takes to get a home sold Out of all the viewers of that page (326 to be precise) only four left comments which leads me to believe that most people really do not know (or are too shy to leave a comment). Of those four responses, and this is clearly a limited sample, all four said price.
Terms like “deep concessions by the seller,” and “lop off another -15% for good measure” really display the bitter attitudes some have towards the Sellers market we had over the past few years. Now that we are in a Buyers market there is a definite attitude amongst some to apparently get revenge. I am not disagreeing with that outlook nor do I think there is anything wrong with it. I do find it interesting the approach that some are taking when they are possibly looking to buy a home, which should be a joyous, or at least a measured and at the most emotionally detached decision.
Looking for Value
That was the quote I pulled from one of my favourite contributors, Jesse. Looking for value has a very subjective approach to it. What is “value”? Value is a perception. That $300,000 house that no one wanted in 2000 but was sold in 2006 for $650,000 had no material changes of substance. Certainly not $350,000. What had changed in those years? Perception of value. Now that the market has swung back to the buyers perception of value is different from what it was last year (or even last month). It is constantly changing. Developers and Receivers have obviously recognized this and have marketed their homes with a big splashy “Everything Must Go!” approach recently and it is working. They advertise “Up to 40% off!” and people buy in. They see the ads and get distracted from taking a truly objective approach to the purchase all the while thinking “I am getting a good deal”, or “I am paying far less than the last guy”. Well, I hope you did your research. Here is my quote from 24hours Newsapaper:
But while claims of deep discounting can be enticing, realtor Will Wertheim says buyers must do their research to figure out if they’re really getting a steal.
“I think people get really pulled in by the marketing claims of the 20 to 40 per cent, but then you really have to ask, 20 to 40 per cent off of what,” said Wertheim, a realtor with The Residential Group.
Yes. 20-40% off of what. Off of last years inflated price which had no chance of selling except to a handful of poor souls or off of today’s market price? If it were off of today’s market price then you may have just found a really good deal. From some of the prices I saw in some of the units going through just such a sale the prices were exactly in line with what you might find comparable properties to be listed for. they might be a bit less but then you factor in the GST that you’ll have to pay and quickly you see that you are paying what others are asking for similar homes (the townhouses at H&H being a very good exception asked $100 less per square foot than the other 21 units available downtown).
Did it matter to those buyers? I suspect they didn’t even realize it. They were blinded by the marketed headline of 20-40% off and gave in to a greedy sense of perceived value.
And that is just the price we are talking about. What else gives a buyer perceived value? After all, if it were just price then the lowest priced listings would all be selling and they, in fact, are not. You also wouldn’t need much of a realtor. I’ve always said that a Realtor wears two hats when working for a Seller: Sales and Marketing.
Marketing is the ability to get the home out to the greatest number of qualified buyers and their agents. It includes pricing the home so that it is well positioned to its comparables and showing the home in the most appealing way to the widest number of those buyers. I use a professional photographer to shoot the pics, provide a floor plan to show off its great layout, produce a video of the suite and surrounding neighbourhood, and write my descriptions in the second person singular (“You”) with a lot of verbs all the while extolling the virtues and benefits of the home. This places the potential buyer in the owner’s shoes. They become attched to the home and learn how owning this one will benefit them both objectively and subjectively. I can’t tell you how many realtors have called me up for showings telling me their buyer picked out that home to view and that means a lot to me because it means I did my job well and achieved a positive result.
The next step is during the viewings. How does the Realtor show the home? How do they present themselves? Are they welcoming and informative while creating an atmosphere of calmed excitement? Do they ooze passion about the property which is infectious? Are they early to the showing to ensure that everything looks, smells, and sounds even better than possibly expected by the prospective purchaser? When the Realtor speaks to the buyer’s agent and their clients do they try to build a friendly and welcoming rapport and introduce the lifestyle that the purchaser may buy into? Does the Realtor know more about the home and its neighbourhood than even you, the seller, do? If not (likely not) do they really encourage you, the seller, to share your insight and do they listen intently to what you have to say? After all, there is nothing worse than a listing agent who cannot go beyond answering a question that may have been answered on a listing sheet and there is certainly so much more that can be said.
These are all things that I do. Never too assertive, pushy, or like an interrogation but more with the absolute goal in mind that “I really like this home” and “I want you, the buyer, to feel attracted to it and emotionally attached to it when you leave for the next showing”. It is all about the positive impression made. That is another reason why I attend every showing. The buyers agent has no ability to convey that impression because they do not have the insight I would have into the property and ultimately they have one goal in mind; to help you purchase a home, any home A listing agent’s job is to encourage that the home of theirs you viewed is the home you never forget and want to spend more time in.
Salesmanship is the other trait that a listing agent must wear well and can be a key difference between selling a home or not selling a home, or worse selling a home for less than it could have been. Negotiations do not start with the offer coming in. Negotiations start with the very first call to schedule a viewing. Is the listing agent able to build up a positive rapport with the buying agent during that time? Do they show up early to the showing so that everything is ready to go when the buyers get there? Do they make sure to answer all questions well and create a positive and welcoming environment for the other party? Do they create a true “let’s work together” attitude so that the buyer’s agent leaves with a very positive outlook on the potential relationship and dealings? These things matter when it does come to crunch time and working out the terms and numbers. A buyers agent who dislikes the selling agent is a lot more resistent to whatever persuasion a listing agent may present in a negotiation. After all, who even wants to speak to someone they do not like or find unprofessional?
Jesse said that the original question was a great one without an obvious answer. That assessment is bang on. It is not an obvious answer. Price does have a lot to do with it, but it does not have everything to do with it. From my experience homes are sold based on emotional attachment. Price is just one aspect that gets worked out in the negotiation. Perception of value is something that is created or destroyed in the listing and the presentation of the property. It is a Realtor’s job to communicate that perception of value.
That is what I think it takes to sell a home in today’s (or any other) market.
Vancouver, BC 
Sure, any information you post on a website about the home is going to help it sell. People like to see pics and videos and commentary – that’s great stuff. Anything to avoid having to constantly bombard my realtor for information that buyers should have access to in this day and age. All that other realtor stuff and emotional attachment is hogwash. Price is number 1, transparency is number 2, see the URL: http://www.quadrahomes.com/projects/pricing-availability.html – what a great idea to show pricing on-line. It feels very open dealing with them. As an aside I like their idea of buying down your mortgage for a 5-year term as a concession. Don’t put the buydown in there with a * beside it where the small print says “good for 3 months” or some crap before it goes back to normal. If you are going to buydown my mortgage, do it for a whole term. When will other sellers get it?
Thanks for your comment, Ray. As far as pricing goes, yes, it is very important. I guess we’ll just have to agree to disagree on the other points which I do believe are very important. After all, how else can you explain someone purchasing an $800 handbag, Rolex watch, or Mercedes Benz to fulfill their needs when similar items (both in function and quality) are available for much less?
Ok, sorry. I didn’t realize you were a luxury homes realtor. I thought you were asking for the opinion of normal people looking for normal homes.
I’ve been in deals of all types of properties with all types of clients, Ray. From those looking for a decent starter home for their family to those looking for a hip Yaletown pad to those looking for something absolutely filthy that needs to be torn down and made beautiful again. Purchase prices have been as low as $168,000 to as high as $1.89m.
And I have worked with buyers like you, as well. Ones that focus solely on the numbers. Being that I go through so many homes day in and day out I am rather desensitized to the average home and would be looking solely at the numbers myself.
Most buyers are not. They focus on flooring, paint, wallpaper, stainless steel, and other items that can be easily changed. I have a lot of stories I could tell where the moment “clicked” for the buyer and what it was that made their opinion go from “nice place” to “Yes” and none of them have to do with numbers. I have other stories where the numbers which were on the listing weren’t so much the issue but the lack of numbers in the bank that were. This has happened many times with buyers who fall in love with properties beyond their price range (waaaayyyy beyond). Rationally they should ignore it but they don’t. They are emotionally attached and now paralyzed by it.
After all, if it were solely by the numbers then owning is the luxury experience (the handbag, Rolex, Benz illustration prior) out of reach by the vast majority of folks in the city and the rental option is the product in the discount bin. Both will grant you access to a shelter. One will just cost a lot more for the benefit of being on title and whatever, if any, advantages that may hold in the future.