Setting the Right Listing Price A Key to Maximizing the Sale Price of Your Home

Please find Hudson’s article below as featured on Guelph Today!

Overpricing could backfire as Guelph real estate market hits buyer fatigue, says head of local real estate group.
You don’t have to have much experience in the real estate market to know that listing your house in a seller’s market increases your chances of maximizing your sale price.

That fact has been driving Guelph’s hot real estate market for the last couple of years and has made it challenging for buyers who see competitive bids driving up the cost of purchasing a home.

According to some real estate experts, however, there are signs the market has capped out, which means having a proper pricing strategy could make all the difference when it comes to selling. Read on to learn how to maximize your home sale price.

“In a market with a trajectory like we’ve seen here, it’s very common for list prices to follow sale prices upwards,” said Hudson Smith, head of a local team of Guelph Realtors at the Hudson Smith Real Estate Group. “As we see the market top out, which we have in a number of cases, there’s a barometer established now. People who set their list price based on the most recent sale prices are being challenged. In isolated instances, there are properties where we scratch our heads and go, ‘Wow, that sold for a lot of money’. But we’re seeing buyer fatigue. People are being pickier.”

Hudson said there are many different factors for what he perceives to be a stabilization in Guelph’s real estate market, especially with the busy summer months for real estate on the horizon.

While he doesn’t believe that COVID-19 changed the market in any significant way, Smith says it did create a highly focused consumer group who were excited to set real estate goals and had the time to see them through. He sees that changing as pandemic restrictions ease in Ontario.
 

“I think as we come out of the lockdown, people will be distracted with other activities,” he said. “This is listing season as well, so there’s more supply coming up than before. People can only ignore high sale prices for so long before they decide to list their home. We have a market on an upswing creating more supply. All of these factors could distract what has been a completely undistracted audience of people. What we’re seeing is the need to have a proper pricing strategy when listing. You only have a short window of opportunity to maximize your sale price, so you want to be sure you’ve set the right list price for fast sale.”

If you’re considering marketing your home and your primary goal is maximizing sale price rather than just a quick sale, Hudson says the key is listing your property at a price where the majority of potential buyers see the value.

He says when a market is on the verge of topping out, many people make the mistake of listing their house based on the eventual sale price of similar houses recently sold.

In such instances, Smith says sellers are really setting a price based on the willingness of just one buyer eager to pay more than everyone else, instead of recognizing that 10 to 15 interested buyers felt the price was too high. Thats’ why it’s important to maximize your home sale price with the help of a realtor.

“When prices stop rising, it’s more important than ever to set the right listing price,” he said. “The market won’t lie to you. Your goal is to get a large cross-section of people through to see your house so you have a high conversion rate, which means for a certain number of people through the property, you have a percentage of people actively pursuing the purchase. To do that, they have to see the value. It’s like paying $50,000 for a pool, then adding $50,000 to your list price and expecting someone to pay full value.”

In such an instance, Hudson says a smarter strategy would be to raise the value $25,000 to attract people looking to buy a home with a pool. “You’re creating a better audience because more people will see the value, and when they do, the market for your home starts to rise upwards.”

Ultimately, the market is driven by demand, and Smith says he’s been seeing the first few price drops in a long while as sellers adjust their list price to attract buyers. However, he says there’s no need for sellers to panic.

“We are seeing more homes selling for less than they’re asking, but not all. We’re still seeing lots of multiple offer scenarios. We still have a strong out-of-town audience. It’s simply more important to price where the majority of your audience recognize the value.”

Given the volatility in the market, Smith says there’s one important factor sellers need to consider: it’s never been more important to use a professional Realtor to maximize your sale value.
 

“You still have to have a really good agent working for you. Calls have to be made quickly. To an out-of-town buyer, street names like ‘Baltic Avenue’ and ‘Boardwalk Street’ would mean the same thing, because they don’t know anything about the area. Your marketing material has to be key. You have a limited amount of time to foster the best environment you can, and using a realtor is the best way to do that.”


08 Dec, 2023
Navigating the real estate landscape Welcome to the first instalment of our monthly series dedicated to Baby Boomers and even some Gen X’ers navigating the real estate landscape and embracing lifestyle changes. In this series, we will delve into various aspects of the home-selling journey, offering valuable tips and insights specifically tailored to the unique needs of this demographic. The decision to sell your home as a baby boomer is often more than a transaction; it's a pivotal moment that marks a new chapter in your life. Whether you're an empty nester looking to downsize, seeking financial freedom, or simply ready for a change, this series aims to be your comprehensive guide. In this inaugural article, we'll explore why now might be the right time for baby boomers to sell their homes. From the emotional aspects of letting go to the practical considerations of market dynamics, we'll cover it all. Without further ado, let's dive into the first topic: Embracing Change – Why Now Might Be the Right Time for Baby Boomers and even some Gen X’ers to Sell Their Homes. As the winds of change sweep through the real estate landscape, many baby boomers are contemplating a significant life decision – selling their homes. While the emotional attachment to a home can be strong, there are compelling reasons why now might be the opportune moment for baby boomers to make this transition. Empty Nest Syndrome: The kids have flown the coop, and the once vibrant family home might feel a bit too spacious now. Downsizing can not only reduce maintenance costs but also provide a newfound sense of freedom and simplicity. Financial Freedom: With property values having likely risen considerably from the time you purchased your first home, selling and downsizing can provide a substantial financial windfall. If you are Gen X or Baby Boomer, this is a tremendous opportunity to bolster your retirement savings, embark on new adventures, or even assist your children with their own housing endeavours, while simultaneously simplifying your life. Maintenance and Upkeep: As homes age, the upkeep and maintenance demands can become more burdensome. Selling your home now could mean leaving behind the hassle of constant repairs and yard work, allowing you to enjoy a more relaxed and maintenance-free lifestyle. Shifting Market Dynamics: The real estate market is ever-changing, and keeping a close eye on current trends is essential. With high demand and low inventory in many regions, baby boomers may find themselves in a seller's market, potentially fetching an optimal price for their property. Even when the overall market has cooled, as it has over the past 18 months, there are always properties where it doesn’t matter what the market is doing, demand will always remain high with Sellers still fetching a premium for their homes. Lifestyle Changes: As Gen X or Baby Boomers entering a new phase of life, your lifestyle preferences may evolve. Selling the family home can open the door to new living arrangements that better align with current interests, whether that be a smaller residence, a retirement community, or even a travel-centric lifestyle. While the decision to sell a home is deeply personal, considering the current market conditions, lifestyle changes, and financial opportunities can help you make an informed choice. Embracing change and seizing the moment might just lead to a more fulfilling and comfortable future. If you feel you may be ready to embark on a new chapter, explore different living arrangements, or capitalize on the current market dynamics, or, you're a baby boomer that is contemplating the sale of your home, let's have a conversation. Together, we can explore your options, discuss market trends, and create a personalized strategy to maximize the value of your property. Contact me today to schedule a complimentary consultation. Let's turn the page and embark on this exciting journey together. Your next adventure awaits! Written by: Tom Hillson, Sales Representative
15 Nov, 2023
Purchasing a home in the current market In September there was a lot of talk on the return of the real estate summer slowdown. I addressed the concern and panic among some sellers in my newsletter, and how this shift is an integral part of the ever-evolving real estate landscape. This volume will focus on the advantages of being a purchaser in the current market. Healthy Market Stability: While the market's pace may have slowed down, it’s important to recognize that this is a sign of a healthy and balanced market. Buyers now have the opportunity to conduct thorough due diligence before finalizing a property purchase. Conditions like financing, inspections, and sale of property are back in play, allowing buyers to make informed decisions. Fixed Interest Rates: The topic of interest rates has recently experienced day-to-day fluctuations. With the Bank of Canada bond yields decreasing this week, we anticipate a continued reduction in fixed mortgage rates. It's important to note that bond yields and fixed mortgage rates have a direct connection. Meaning when bond yields lower, fixed interest rates decrease. Although lenders have begun to reduce their fixed rates, the decrease is not as significant as the fall in bond yields. Current rates for an insurable 5-year fixed are 5.75%. Lenders rates tend to take the elevator on the way up and the stairs on the way down. Overall this is excellent news for anyone with a mortgage renewal approaching in the near future.
By Hudson Smith 19 Apr, 2023
Real estate in Guelph I am not going to pretend I know what is going to happen, but with so many people asking me, it’s only fair I try. I mean, I have my opinions, and I will continue to make my personal decisions when it comes to real estate and investing based on them – and when my clients ask, I will share how I feel. So, how do I feel about the real estate market? Well, actually pretty good. And how did I feel last month? Well, pretty good. What about a month from now? Yes, pretty darn good. How can you feel good about something that so many are feeling bad about? Well, I am not quite sure that the owning of real estate, or the homes people want, or the investments they hope to make have people feeling bad; I imagine it is more about the new interest rates. Let’s look at the investment of real estate first. Whether you are renting it out or living in it, it is a choice of what to do with your money. For the people that are living in it, it’s great to know that it is an investment, because you have to spend money on housing regardless. When we look at any investment we always ask ourselves, “Does this make sense?” The simplest way I can look at real estate and answer that question is to say, I have a product and the people that want and need this product are growing, and the availability of this product does not seem to be doing the same. Describing it this way helps make the most sense to me. I guess I could say the same thing about Coca Cola, but there is Pepsi, Sprite, water, beer, and this Prime drink that my kids won’t stop talking about (don’t get me started). So real estate as an investment makes sense, as there is no alternative to housing. What about everything I am reading about prices going down? Well, real estate prices are going down now, since the rates people use to afford them have gone up. When the rates go down, you know the prices will start to climb again. The market is very healthy – I have been saying this for months. The reason we’ve noticed some homes not selling is due to the sellers adjusting their price expectations downwards slower than the buyers are. The sellers are still willing to accept the price of a spring ago, but the buyers are the ones calculating the interest rate. When rates go up that quickly, it’s hard for sellers to accept things fast enough, so buyers wait, and one by one new sales prices give data to sellers that say “You see, these are the new prices,” and a reluctant decision takes place by way of a price adjustment and then another sale happens. In the spring market of 2022 prices rose but when interest rates started to climb prices fell. Although real estate goals still existed, and people still wanted to invest, the falling prices is what grabbed the headlines, so that healthy underbelly lies just below the surface. Now here we are, in the early part of the year and what can sometimes be the barometer of how our real estate market will perform. How is it going? Well, the supply and demand levels have once again tipped in a slight favour of the seller, but buyers armed with a different interest rate are taking a more calculated approach instead of having a fear of missing out. To conclude, a properly priced home will sell, an underpriced one will sell for over asking, and an overpriced home won’t sell at all. You see, nothing to see here, just a regular old spring market in Guelph. Thanks for reading, and I thought this quote would be fitting. “When the market is greedy, I get scared. When the market is scared, I get greedy.” -Warren Buffet
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