My home is not selling. What’s going on?
My home is not selling. Is this worry wearing you down like the many other stressful events in your life when you wonder, why is this happening to me? Well, life events can be broken down into two perspectives: things in your control or your karma, and things not in your control, or your luck. Outcomes can be positive or negative in both situations, despite your best efforts, desires or even lack of action. Some may argue that there is a 50-50 chance for everything in life. And this rings true for real estate transactions as well.
Waiting for your house to sell is definitely one of the most stressful times of your life. Let’s first explore what makes your home sell in the first place. We know that there are many factors that make the home sell. Remember, however, as we just mentioned, there are things within your control (karma or actions that you and your Realtor can take), and things that are outside of your control (luck or influencers like market conditions, location and features of your home).
The most important factor that is not in your control is market, and no one can perfectly time the market.
If you are one of the many home sellers in today’s Mississauga real estate market struggling with why my home is not selling, you have to understand that the current market condition is trumping everything else right now. Even though this is the prime season to sell homes, we are witnessing a ripple effect of Ontario government’s announcement of Fair Housing rules on April 20, 2017. People who sold their homes between January 2016 and mid April 2017 got far more than the fair market value for their homes. However, within a week of the announcement, home inventory simply stopped moving. It feels like buyers have simply disappeared from the market.
What is involved in selling a home successfully!
Selling a home successfully also has to do with many variables within your and your Realtor’s control, including: setting the right asking price, undertaking necessary renovations and upgrades, staging the home and rolling out with effective marketing. Marketing is a big one in itself. Typically, a good realtor spends 10-15% of his commission on effectively marketing your home for sale. Since 90% of the buyers come from online these days, a lot of emphasis has to be put into online promotion of your listing through keyword and search engine optimization, blog posts, video posts and ads on popular sites like Kijiji.
When prospective buyers use typical keywords to search for a particular type of home in a specific neighbourhood or school district etc., your listing must pop up on different sites. This is to build mass awareness of your listing and drive traffic to your listing. Once the consumer looks at the listing, they must be enticed through attractive images, videos and content to view your property. Now that you have traffic flowing into your property, they must like what they see. Here the location of home, age of home, updates, upgrades and overall presentation of the home comes into play to please the five senses of the buyer(s).
Home staging plays an important role in making your home look more appealing. Typically, your Realtor will suggest simple de-cluttering and will spruce up the appearance of your home by bringing in certain props like cushions, paintings, flowers etc. that accentuate the existing colours or themes of your home. This is usually part of the standard listing Realtor’s fee. However, in some cases and depending on the need and seller’s budget, a complete top to bottom home staging may be necessary, which might require bigger furniture items, furnishings and decoration. This can add $2,000-$3,500 to the selling cost of an average home (often paid by seller or built into realtor’s commission). It is up to the seller to decide if they are willing to spend that additional money.
My home is not selling even though we took all the right actions together with our Realtor.
It is important to know even if you and your Realtor take all of the right actions, your actions will bear fruit in a normal or a balanced market. Unsettled market conditions can throw all of the efforts out of the window. Adverse or unsettled Mississauga real estate market conditions can either reduce traffic to your home, delay the sale of your home, or fetch you lesser dollars than your expectation.
Why my home is not selling – let’s try to understand the different market conditions
The supply of homes on the market exceeds demand. This give negotiating leverage to buyers.
The number of buyers wanting homes exceeds the supply or number of homes on the market. Buyers may have to pay more and make decisions quickly.
The number of homes on the market is equal to the demand or number of buyers. Homes sell within an acceptable time period and prices are generally stable.
Today’s Housing Market in Mississauga
The current real estate market condition in Mississauga is that the market is trying to auto correct from a Seller’s market to a normal or balanced market and consumers are yet to adjust to this drastic swing. What we experienced in the last two years was a unique sellers market condition, a market where every home would sell. They would not just sell, but get picked up at obnoxious prices. People were buying on market hype and frenzy. Sellers who are currently in the market are in a denial mode and are not willing to accept this sudden price adjustment. They are questioning their Realtors about anything that they may not have done right. Buyers are simply bewildered and have gone into a mode of inaction, expecting a further price decrease. This is chance or luck impacting the sale of your home that I referred to above.
I have been sharing my experience with my fellow realtors regarding my current listings in the market. These colleagues have also pulled all the tricks out of their hats to sell their listings, but even they have similar experience on their well-priced, top-staged and top-marketed properties. It is a phenomenon across the board. We are not getting showings, and if there are no showings, there are obviously no offers. Buyers are not willing to pay what sellers are asking for and so they are not coming to see your properties. The new rules have forced buyers to calm down and evaluate their options. This trend can continue if more and more listings keep hitting the market. Or this trend can go away and buyers will come back if the number of listings in the market fall eventually.
The recent rules were like a jolt to the market and consumers are recovering from the vibrations of the jolt. There has been a lull in the market. I have never experienced this before. We are not even getting any showings. Where did all the buyers go? Well, Those buyers are very much here. All they are waiting for is for the dust to settle down. They are waiting on the sidelines, waiting for more listings to come for more choice, they are expecting prices to come down further. I can tell you from recent experience that prices have already adjusted. We just bought a home 12% lower in value than what similar homes were selling for in March of this year. The sellers who were in a denial mode are now slowly adjusting to the new reality and new price trends.
It can be a matter of time when the buyers will come back to the market because the fundamentals of the Canadian economy are strong, there is no supply of new land for construction of homes in Mississauga, and there are more and more buyers entering into the market every month. These include the regular newcomers who just got their PR , H1B visa people from the US, who are fast approaching Realtors to buy properties. There is confidence that the market will bounce back thanks to the new economic class immigration this year. But there could also be some bad news that can affect our housing market if our overall economy slows down. For example, re-negotiation of NAFTA (U.S. buying 3/4 of Canada’s exports) might have an affect on Canadian households and banks.
My home is not selling – Tips for the current market condition
If you are thinking of selling your property and buying another home, don’t buy a higher priced home before you sell yours. There are enough listings in the market. One must sell first before buying.
If you have already bought an expensive home, and are now looking to sell – you are indeed in a tough spot. I feel for you. Your realtor must already have advised you otherwise, or perhaps not, as no one can time the market. The only thing you can do is to see whether you can get an approval to hold both the properties. In this case you can rent out one property. I am quite confident that in the long run everything will be fine and you will do very well. You will thank yourself for making the decision of carrying the two properties, if you can afford to.
If your bank is not giving you approval to hold both properties, then you must sell. And to sell quick the only way you can sell is to put the best put forward with top marketing, top home staging and a low price. You must also compensate your realtor fairly to motivate him or her to sell your property. You should also pay a fair cooperating broker fee, so that they get attracted to show your property to their prospective buyer clients. These are the things within your control. Regarding the market condition which is not in your control, all you can do is hope for the dust to settle down fast.