Selling in a Buyer's Market

My thoughts on how to get your home sold in Edmonton today.

Comments

[TWZ]

Thanks, Sara...great video.

It's common sense, but it's not so common.

There's still a lot of people presenting their homes poorly or with botched renovations and expecting them to sell like 1.5 years ago.

[Sherwood Park]

I'm having a very hard time selling my house right now in Sherwood Park (I'm using a realtor). We've had the house on the market for 70 days and have been told (by buyers and realtors) that the price is good, but some are thrown off by the layout a bit. Something that I cannot change. All comments have been very positive - nice clean house etc.

We've now moved into our new house and now the other house is empty.

Poll - would you buy a house with no furniture or would you prefer to buy where the house looks lived in?

Two mortgages is not what I want and that'll be reality on May 1st.

[TWZ]

I'm an interior designer and I have never had trouble selling.

1 year ago while it was starting to cool down and DOM climbed, there were units in my building for 40 days...I sold in 6. With offers to buy my art and fine furniture pieces.

In mid February, I listed my small revenue property - renovated but no furniture and my usual flair. I was competing with 100's of listings in the area. After a month of frustration, I did a trip to Edmonton from Kelowna with a U-Haul of accessories and select furniture pieces. 5 days after I did this, had a strong offer that led to a sale...Keys handed over recently.

This housing market is going to be a boom for Designers like me and for Home Staging companies.

[ben]

Sorry TWZ, but I think designers only attract one kind of buyers. I belong to the other kind.
If a house is furnished, I just do not visit it. Me and my husband like handy work. What we are looking for is quality of structure, flooring, hidden defects, leaks etc. So the house should definitely be empty.
Also, when I visit a house, I visit a project, I visit a place that I will make my own by repainting, changing the lay out, etc. I find it very difficulty to let my imagination wander if the place feels like inhabited by somebody else.

And finally, every time I visit a furnished-renovated place, to me they all look the same, they look sooooo 2008, with their collection of brownish colours and granite countertop. It feels like shopping at the Pottery Barn. While, I need something out of the ordinary, a place that reflect who I am and that won't look soooo 2008 in 2015.
Different people, different opinion. There are enough houses on the market to offer both options.

[Nate]

I agree with Ben and prefer to see an empty home.

Tastes just vary too much and seeing homes with antiques or furniture that I don't care for, instantly turns me off of the home.

But I've heard just as many people say that an empty home feels smaller and that they can't picture their own stuff in the rooms without someone else having furniture already setup.

[mdm]

I like to see houses with some furniture in them, so that I can get an idea of how much space there really is for a 3-seater sofa or a king-size bed. Empty rooms can be misleading for that.

However, I cringe at overly staged homes with "inspirational" artwork on the wall. Somehow it makes me think of some of the overpriced "flips" I saw, last year, and I am not willing to pay for someone else's value-add, when I, myself, enjoy renovating.

Essential pieces of furniture and clutter-free spaces do it for me.

[Johnny]

Although many people, myself included like houses that are fixer-upper bargains that are empty, the vast majority of buyers get suckered into the staged house. I sold a house last fall, got no action the first month. We then did minor reparis, moved out clutter, painted everything beige, and brought in nice accessories (ie pretty towels in the bathroom, fancy mirrors, matching throw pillows, etc) and got a sale shortly after.

[Nate]

Safe to say that you either want to stage the house so that it's clean and trendy, or have it clean and empty.

Clean and tidy are essential either way.

[Michael]

Sherwood Park,

Can we assume that when the houses were flying off the shelves that there were a lot of first-time buyers involved and therefore the idea of furnished property being more attractive?

I think there are far more important factors involved in selling your home in this market than whether it is furnished or not; competitive inventory and price.

Do you think you are asking too much? A lower selling price may seem steep at the start, but the alternative that involves carrying costs and the potential to be stuck with 2 houses for longer may be far more painful. Those costs add up quickly. Especially when 1 is vacant.

However, if you have no issues paying for 2 houses, then it should not be a problem for you to hang in there to get every last cent that you are after. But it can be like throwing good money after bad.

It must be difficult for people to take a chance like that and just go ahead with your new home before the old one sells.

I don't think I would have the stomach for such risky business when it involves the roof over my head and the lions share of my families financial worth.

TWZ,

Keep us posted on your success as an interior designer. Do you make as much money as Realtors do? How do interior designers charge for their work? I really know nothing of your line of work, but I remain curious.

[bunny]

Sherwood Park said:

---I'm having a very hard time selling my house right now in Sherwood Park (I'm using a realtor). We've had the house on the market for 70 days and have been told (by buyers and realtors) that the price is good, but some are thrown off by the layout a bit. Something that I cannot change.---

Of course you can change it---by reducing the list price.

A competitively priced property will have no problem getting sold today.

[bob]

Thanks for this.

I've noticed that most of your posts are about the "sellers" end of the market.

How about a post on how to be a buyer in today's market? How to negotiate a fair price. How much markdown you can expect to ask for, etc.

That would be useful for lots of people who are looking to buy and, indirectly, could help those looking to sell.

[karl]

bunny,
Sherwood Park said the price is right, buyers are thrown off by the layout.
Why reduce the price?

[karl]

bob
I checked Mike Fotiou's website,
-Calgary MLS Daily Stats- Single Family homes and Condos- and the listing price/selling price ratio is consistently 97-98%.
There is an occasional over/under 10%.
I would say, it is the same here, in Edmonton.
I hope, you can use this information.

[Vern]

I know how to sell a house. Drop the price till it sells.

Price never goes out of fashion.

[Pivotal]

Sherwood Park:

If potential buyers are thrown off by the layout you may have to price the home with the layout in mind. For example, is the bad layout worth a 10k or 20k discount? Would buyers like the layout a little more if they paid 5k less?

As for furnishing the home, I would recommend it since you have a layout problem. Perhaps furnishing it in a way that would make the layout more attractive. A buyer may walk into your empty house and think the layout would never work just because they can't picture it working. If you can make the layout work with adequately placed furnishings then you may not have to discount the home due to the poor layout.

[jim]

Hey Sherwood Park,
With rents going up almost 15% this year, why sell? Just rent the place.
http://www.canada.com/edmontonjournal/news/business/story.html?id=c97aa217-de49-429a-bb6c-56855eeffae9&k=43732

[Nate]

Hey Jim,

Just renewed my lease and they didn't raise the price. But I got nailed by another $10 for parking per month.

The boardwalk towers near my place have all dropped their monthly rents by $100-200.

Shop around, rents are probably going to drop 15% this year.

[TWZ]

Michael -

It depends on what outfit you're with.

First off, there's pretty blondes that will stick a design/cell # decel on the windows of their Escalades and let themselves loose on the world after watching HGTV for a few months LOL

- Some charge an hourly rate anywhere from $50-$150/hour + a margin or commission they make on items using designer discounts - most of the time and arrangement they have with a store.

- Some charge either the hourly rate OR the margin markup using their discount.

- Some work in a furniture store that sometimes charge an hourly rate (which the store gets most of the time) - and make commission on what they sell...you have to be skilled for this one because the furniture stores are really pushing their "design staff" and people are becoming wise that they're just inviting sales people into their home.

- Some work with a design firm and there can be many different arrangements in this situation anything from a monthly "desk fee" to commission and everything in between.

- Home staging companies come in, tell you to declutter, move your exsisting furniture around and will often own a sizable furniture and accessory collection and will "rent" it to you. Lots of those blondes in the Escalades I spoke of will do this kind of thing but will try to make it look like they are designers.

Me? I work with a high-end design firm that grew it's own appointment only furniture gallery for the design firm. I charge $125/hour and get a salary + commission bonus, but I refund my clients a decent portion of the design fee from the furniture or blind package that they choose if it exceeds $15,000 which is often does. I need to protect myself from flakey and non-commital clients, which there are many...not cruel, just qualifying clients and not wanting to waste anyones' time. Lots of people will be Ashely's of Brick clients and will have you in to "choose colours" and pretend to be interested in the $6,500 sofa and $18,000 Hunter Douglas package - then never phone again...the $125/hour cuts through that BS like there's no tomorrow.

[Jack]

Maybe the price increases over the past 2 years have made first time buyers unable to afford a home? That's where I stand. 260's for a home is decent and affordable. 460's is not. We didn't get a major increase in population but home prices doubled.

Smells like a bubble to me and I am waiting to see what happens. Prices don't look like they will increase because of record highs in inventory and low sales. They look like the only way the can go is down.

[John]

Can someone explain to me how they figure rents wil go up by 15% this year. Along with the house inventory going up, wont rental unit inventory increase as well because of owners not being able to sell there homes, supply and demand theory doesnt warrant an increase. Any thoughts??

[TWZ]

I think EVENTUALLY they will go down to match the market, and only if they stay that way...but there's too many rentals that are written with previous higher mortgages for them to compensate immidiately.

12,000 or whatever it is seems high, yes...but think of the ENTIRE inventory in Edmonton and what the people are locked into.

Rentals rates follow the market, they don't lead or follow WITH. Give it some more time...but I think it will be status quo with rental rates for a little longer until more of the inventory is cleaned up.

[Sherwood Park]

Only a three of the potential buyers mentioned that the layout might not work. We have a dining room area right at the front of the house, but we used it as a sitting room.

To the person who said that they couldn't imagine moving into a new house before selling our old one. That was certainly not our intention, but our realtor assured us that he'd sell our house no problem. We moved into the new house two weeks ago and had the old house listed at the beginning of February. Our house is listed under 400K.

[Jim Junkin]

To stage or not to stage. There are so many variables to the sale of a property I think we need to look at staging as just that - a variable. Obviously some properties are in a great need of help, while others may have a homey lived in appeal. As agents I believe it is encumbant on us to evaluate our client and their home, then make the appropriate decision on the best path to achieve the best price in the best time frampossible for our vendor. That may or may not be with the aid of staging.

[pacific]

TWZ,

Thank you for the good information.
I too am going to sell my house in Sherwood Park. (I work offshore and we are looking at Vancouver Island)
You comments about various types of Interior designers are spot on. I obliviously want max dollars for my house, and I think 150 dollars is fair, (would that include a visit to the house?)

Anybody…I have an empty “flex” room near the front entrance, it is enclosed with French doors. Should I borrow/rent an office suite or set it up as a formal dining room?

What do I do with my kids stuff? I mean this obviously a family house with a large swing set and sandbox, so there is no hiding them. I expect we will be on the market for some weeks, so does anybody have any good tips on keeping the house tidy, but still liveable.

Sara, Sheldon. I may a good deal pending with an agent, who will only be charging me expenses (relative). Is it possible to advertise the fact on the MLS that I will up the commission on the buyer’s agent? I am thinking 5 to 8 %. Would this help in drawing more viewers?

Thanks for the helpful discussion.

***Our thoughts regarding offering bonuses to buyer's agents are here: http://www.edmontonrealestateblog.com/my_weblog/2007/09/buyers-agent-bo.html

[brent]

john,

Consider the source. lol