Timing the market is incredibly difficult, often doesn’t work and is also largely unnecessary. Instead of caring about the market as a whole, seize a specific opportunity to get the best possible result for you for your sale or your purchase. Here’s how you prepare on both the buying and selling sides to take advantage of opportunity.
Taking advantage of buying opportunities
With what is happening right now with the COVID-19 pandemic, there is no question it’s a difficult time to get out and see places. We’ve been seeing lots of listings cancelled as sellers decide that the risk of exposing their home and family to health hazards is too much at this time.
There still are properties being listed and selling and as we see plans for re-opening the economy implemented, we think it’s likely that sellers who have been waiting will feel comfortable putting their homes on the market.
Whether it is this week, this month or this year, there will be buying opportunities that come up that are suitable for your needs.
The trick is to be ready to move quickly and to leverage your strengths as a buyer to get a great deal. Let’s unpack what that means.
Know what you want
It seems obvious, but one of the most useful things that can be done in times of uncertainty is gathering the necessary information to have an understanding of options and decide what it is exactly that you want.
Work with a Realtor who will actively provide you with whatever limited options are currently available and help you understand what the “normal” market looks like and how deals are taking place these days.
Consider specific properties and discuss with your loved ones what appeals, what doesn’t, what is crucial to your happiness in a new home and what is a nice to have but doesn’t absolutely need to be there.
When non-essential travel is more viable, take drives to neigbourhoods and areas you’re considering. Look at the streets, transit options, nearby retail strips and proximity to the people and activities you want to focus on in your life.
By having a very good understanding of what you want, as the market evolves you can seize opportunities that fit your needs!
Have everything ready
Opportunities don’t last and nowhere is that more obvious than in real estate. Time is of the essence and there are a number of aspects to a purchase that can and should be done beforehand.
Go through the full mortgage pre-approval process with a mortgage broker or a bank and make sure you’ve provided everything they need to give you a specific approval. Don’t rely on simple tools online to give you an estimated budget. Speak with professionals and provide them with income verification, tax documents, credit reports and job letters.
Similarly, make arrangements with a lawyer so that you can ask any questions now about the purchase process. They can help you understand costs and steps in the process so you aren’t caught by surprise by anything or slowed down during the offer phase.
Finally, formalize your relationship with a Realtor. There are documents that are only signed for a specific property as you make the offer, but there are other documents that authorize the agent to work on your behalf and they can and should be reviewed and signed beforehand. At the same time you can also take advantage of a far less pressure-filled situation to review a sample offer. When you are in a live offer situation, you will have to make decisions about conditions and price in a quick fashion. It is great if you can remove some of the uncertainty and confusion about other aspects of the purchase by taking your time now to understand the documents and the process.
In the event that your purchase requires you to sell a home, make sure you understand timing and all the steps in the sale process during this time. You should also get advice from an experienced listing Realtor as to whether it makes sense to sell first or buy first and how the seller’s market looks at this time.
The last component in getting ready to take advantage of buying opportunities is staying focused on the search. Knowing what you want and having everything ready for an offer is only helpful if you keep monitoring the market and looking for opportunities that fit your requirements.
This means allocating a set amount of time on a regular basis for reviewing opportunities. It doesn’t have to be daily but it should be as often as you can manage. Reviewing new listings and responding to your agent needs to be a priority. We’ve seen clients miss opportunities because they stop looking for them. Remember that a good opportunity likely won’t last long and we need to make sure we see it quickly so we can act. There are great tools available now that provide buyers with real time updates on new listings that fit their criteria and those that jump on the right property get it before competition shows up!
Using market changes as an opportunity to sell for a great price
Let’s look at how changes in the market can also be an opportunity to sell for a higher price than you could otherwise get for the property. While the overall tone for real estate stories related to COVID-19 are negative for sellers, in any market there is a right way and a wrong way to position your listing.
Understand who will buy your property and why
There is a saying at Keller Williams – “Logic makes you think, emotion makes you act”.
In a changing market such as we’re seeing right now, with lots of uncertainty about the future, properties that tug at the heart strings are still selling quickly for very good money.
Buyers who are looking for their next family home, who see a property that fits all their requirements, that sit on a good lot or are in a good building, in a great neighbourhood, are jumping on the opportunity and are willing to pay very good money to get the home.
Sellers who have properties that are less desirable in some ways, where they are good opportunities for a possible bump in value if the neighbourhood improves or if the property is renovated – properties where the purchase decision is a logical decision rather than an emotion decision – are selling at a slower rate and for lower prices.
If you are looking to sell a property, think long and hard right now about who is likely to be the buyer. If it is likely to be someone who has an emotional connection and rationale for buying it, then get it on the market. If it’s more of a logic-based decision that doesn’t have the buyers hugging and crying when they get it, consider waiting until the market is less uncertain.
We often see properties go on the market that have fixable problems that make it less appealing to the majority of buyers. When you have a negative in a home, turning it into a neutral is often a very effective use of time and money.
Potential buyers can overlook neutral aspects of a home, such as a dated bathroom or a basic, aged deck in the backyard. When the bathroom has broken tiles on the floor or the deck is sagging in heavy use areas, it becomes a negative that the buyer has to fix. The cost of such fixes is often significantly less than the cost that a buyer assigns in their mind to it – as the buyer factors in the annoyance of having to do work on their “new” home.
While fixing negatives before listing a property is always a smart move, in a market where fewer buyers are willing to actively look for a home, it becomes crucial.
Track your competition
If you work with a good Realtor, they will keep a keen eye on the level of competition for the type of property you have and advise you when the right time to list arrives.
While understanding buyer motivation in general is helpful, it needs to be balanced against the current levels of supply in your specific market. An active agent can tell you what is happening with listings like yours right now and give you advice as to whether now is an excellent opportunity to sell to an eager pool of buyers with very few options.
You can get real-time updates on new listings through your agent and in the meantime, prepare everything so that when the timing is right, the For Sale goes up that day. It can make the difference between sitting on the market for weeks or months as buyers visit all their options, or selling within days to buyers who don’t have many choices and want to get a deal done.