During the 2020-2021 housing boom, nearly the entire Canadian real estate market was a seller’s market. The buying frenzy was intense amid historically low interest rates, minimal housing inventory levels, and enormous competition among prospective homebuyers flush with cash. Over the last year, the historic growth has subsided. With the Bank of Canada (BoC) aggressively tightening monetary policy by raising interest rates and trimming its balance sheet, the Canadian housing industry began to shift in the other direction, favouring buyers in many markets. With the spring market in full swing, you may be wondering what to do, if you’re selling in a buyer’s market.
In fact, more than half (55 per cent) of Canada’s housing markets were expected to shift into balanced or buyer’s markets this year, according to the RE/MAX 2023 Canadian Housing Market Outlook. A balanced market is when conditions reach an equilibrium (an equal about of supply and demand), and a buyer’s market is when there are more homes for sale than buyers. Indeed, it is a complete turnaround from what occurred before and during the coronavirus public health crisis.
“In sharp contrast to 2022, most regions analyzed in the report will experience more balanced conditions in 2023 – a trend that’s already starting to materialize as a result of current economic conditions,” the report stated.
So, for households looking to sell a property in this environment, how do you begin? We have compiled a guide of tips for selling in a buyer’s market:
Selling in a Buyer’s Market
Here are seven tips for selling in a buyer’s market in the Canadian housing sector:
#1 Price Your Home Correctly
It is crucial to make sure your property is competitively priced. It is important to remember that the buyer has the power to negotiate in a buyer’s market. Buyers also typically have more choices in this kind of climate. Therefore, if you are interested in selling your property, you will need to attract buyers, which can be successfully achieved by pricing your property competitively. You can do so by conducting thorough research in the area of your property and pricing it based on current market conditions. Of course, a real estate agent can help you with choosing a price that will be competitive.
#2 Are Upgrades Needed?
When assessing your residential property, can you ensure the property is in good condition? If not, you may need to go ahead with proper repairs and upgrades. Remember, buyers will always choose a property that provides them with the greatest value for their money. It is essential that your property is in excellent condition and that all necessary repairs and upgrades have been completed before showing the property to buyers.
This can add significant value to your property and assure buyers that they are investing their money in something worth the cost. The goal should be to make your property appealing. If this means a fresh coat of paint, an extra bedroom, or new flooring, then so be it. However, since renovations cost money, the renovations and upgrades should be done considering the price the property will likely command with those changes.
#3 Curb Appeal
Many real estate agents and industry experts typically suggest maximizing your property’s curb appeal. Why? The first impression is usually the last. This is especially true in real estate. The first thing any potential buyer sees is a property’s exterior. Before putting up your property for sale, try to pay special attention to its curb appeal and surroundings. The exterior of the house should not look unkempt. The porch should be clean, for example. Uneven pathways should be fixed. There should be no overgrown bushes, weeds, leaves, broken or bad lights, broken pots, poor landscaping, or spiderwebs.
Overall, the external appearance should be in perfect condition. Only then will the buyer have a positive mindset when examining the property’s interior.
Flexibility was not a common word during the last couple of years. Today, the term is quite ubiquitous. Put simply, always be flexible and willing to negotiate. Since buyers have multiple options and properties to choose from, they have the upper hand in a buyer’s market. Indeed, those interested in selling their property should be open to negotiations and should aim to reach agreements that are mutually beneficial for both parties. This does not mean the seller has to sell his property at a loss. The real estate market typically maintains a dynamic where sellers can still make a decent profit even if the buyers have more negotiating power.
#5 Real Estate Agents
No matter your circumstances, you must always work with a reputable real estate agent. Property owners may have the most fantastic property but finding a suitable buyer still requires the expertise of a reputable and experienced real estate agent. This is even more important in a buyer’s market as real estate agents have more information about market trends and dynamics and can help sellers price their property at the most competitive price and present it in a way that the buyer is convinced that this is the best option for them.
Real estate agents are also better positioned to advise which upgrades or renovations are needed and which might not be worth the money. They know what can give a particular property an edge in the market, and sellers should utilize this expertise to get the best price and buyer.
#6 Presentation Matters
Every seller must present the home properly. Once the real estate agent identifies a prospective buyer, it is vital to ensure they can present your property most effectively. Homes should be staged to make buyers envision themselves in that space. Properties for sale should never be cluttered or dirty, personal items should be removed, and the whole ambiance should be that of space, comfort, and livability.
#7 Try to Sweeten the Deal
In the end, when you are confined to the parameters of a buyer’s market, buyers expect more. One tip to make your property more attractive is to offer something to sweeten the deal. This could include a broad array of features, such as including the home’s appliances or offering an early closing.
For example, an offer to cover some of the closing costs or to accommodate the buyer’s preference for a move-in date and other similar incentives could tilt the buyer’s decision in your favour.
Need more advice? Find a RE/MAX Agent near you.