The term ‘buyer’s market’ has been thrown around for months now despite being technically inaccurate. After all, only one of Toronto’s 36 MLS districts has fallen below the 40-percent sales-to-new-listings ratio (SNLR) threshold that denotes a buyer’s market. (SNLR is calculated by dividing the number of homes sold by the number of new listings.)
Besides the affluent C12 district, which is made up of the York Mills, St. Andrew-Windfields, Bridle Path, Sunnybrook, and York Mills West neighbourhoods, every other district’s SNLR sits between 40 and 60 percent, which is typically viewed as ‘balanced’ market territory. Across the GTA, the SNLR stood at 47.6 percent in January.
That said, a buyer’s market can be both relative and subjective. In an overheated region like the GTA, where the SNLR was a red-hot 72.9 percent just one year ago, it is understandable that many market watchers are proclaiming that the tide has turned in favour of sellers.
That’s another beef I have with all the ‘buyer’s market’ chatter: By employing the right strategies, both buyers and sellers can benefit from what may be best described as a market in transition.
Here, I join Strata agents in sharing ways to do exactly that.
Sam Massoudi | Realtor, Strata.ca
For buyers: “Now that the feeling of urgency has faded, I really enjoy seeing my clients being more meticulous in their search. We can't be certain how long this mild buyer's market will persist, so it's key for buyers to be savvy with their timing, prioritize their needs, and have a clear idea of what they want. Otherwise, they may be swept away and miss some properties that would be great fits for them.”
For sellers: “For the same reasons, I think sellers will have to make sure they're listing their property as flawlessly as they can, because they are now dealing with much pickier buyers. It's not the market to be listing with dirty walls or loose cabinet doors. If there are any minor repairs or paint jobs needed, get them done before listing.”
Jenelle Tremblett | Realtor, Strata.ca
For buyers: “Add the conditions you always wanted to add, especially the financing condition for peace of mind. Now is your time! In a seller's market we rarely add these, but at this point — it won't really affect your offer. If your financing is good and your realtor knows that, they will convey this to the listing agent.
Meanwhile, don't hold off too long. A buyer’s market can quickly turn around. For my clients now, the market feels unpredictable. I've seen houses listed for $1.4 million that end up selling for $1.2 million and the comparables don't even justify it. Then I see other houses listed for $1.8 million but actually want $2 million. Like I said, it's not as predictable. If there is a house you like, know that you can’t negotiate until something is on paper. So shoot your shot, and understand the seller's motivations and timelines.”
For sellers: “Get your home staged. Buyers rarely look at the "bones" of a place unless they're experienced in flipping houses. But they do need to envision a beautiful home. If you have tenants, wait to stage the place until it's vacant. I've had many clients visit properties that fit their criteria — but then turn it down because the place didn't feel warm and inviting.
If you’re not getting the price you want and you don't have to sell, put it up for rent for a year. The market may come back in your favour the year after. And if this is your next strategy, let prospective tenants know so there are no surprises.”
My two cents
For buyers: Before your search begins in earnest, it’s a good idea to get pre-approved for a mortgage so you know how much home you can afford.
Building on Sam’s point about knowing what you want, I recommend seeing as many properties as possible before making an offer. In addition to ensuring you find your ideal home, knowing what's available can allow you to negotiate a better price.
One of the best ways to build this knowledge is to analyze comparable properties and monitor days on the market. You will have more bargaining power if a home has been on the market for a longer period of time. Real estate professionals are trained to perform these kinds of assessments.
When the time comes to make an offer, make sure it includes a significant deposit. That way you can move quickly on an attractively priced home. Other ways to improve the chances of a lower-than-usual offer are to be flexible with your move-in date.
For sellers: Ensure your home is competitive by pricing it to sell. This can be achieved by surveying similar homes on the market — again, this is what real estate pros are all about.
Then comes marketing. This can include attractive profiles on various listing websites, print and social media materials with key selling points and high-quality photos of your home, and even ads in newspapers, magazines and cyberspace.
Other ways to make a home more attractive to buyers include: