After a record-breaking March and April, many consumers are left wondering what to expect as home sales start to cool down in the Great Vancouver Area.
James and Denny provide an update on the trends they are currently seeing in the market, and what buyers and sellers should expect during the upcoming months.
This episode will focus on the continued migration of people moving away from the big city, the effect of a new stress test, rising construction costs, predictions for condo popularity in the future, and the impact of lower competition and fewer offers in real estate.
Buying a home is an important financial decision that can quickly become overwhelming without proper guidance.
James and Denny share the helpful advice that they offer their clients when trying to buy a home.
This episode will focus on a ranking system that can better direct your real estate search, the clarity that comes with seeing many properties, comparing budget versus location, and the importance of learning about the amenities and community offered in a potential neighborhood.
There are many lessons to be learned (and a few mistakes to be made) when starting a career as a Realtor.
James and Denny take a walk down memory lane and recall the challenges and successes of their first year working in the real estate market.
This episode will focus on the benefits of having an experienced mentor, the steep learning curve to being a competent Realtor, the perks of specializing in geographic areas or product types, the value in attending home inspections and asking questions to learn more about the process, as well as the changing technology and strategies of the business.
Buying an older home provides an opportunity for customization, character, and history. Unfortunately, the older the house, the more probability for issues to arise.
James and Denny walk you through some of the concerns you should be mindful of when buying an older home, depending on when it was built.
This episode will focus on what to be aware of when buying into older strata, when to worry about asbestos, the negative implications of an oil tank, the material types that can cause a leaky condo, and what issues to look out for regarding a home’s plumbing and electrical.
March 2021 was a record-setting month with no signs of slowing down in May. As more listings become available, Realtors and their clients find it challenging to know what to offer and how to stay competitive.
James and Denny provide pointers to buyers and sellers who may be experiencing fatigue and frustration while trying to navigate the current real estate market.
This episode will focus on an increase in selection as more inventory becomes available, the proper mindset for multiple offer situations, making a strong first impression with the listing agent, and the frustrations of not getting a call back after making an offer.
Currently, the amount of real estate inventory available to homebuyers is increasing. This is exciting for buyers as it provides more selection and reduces the risk of extreme multiple offer situations. Even still, many individuals are finding it challenging to know the best way to navigate the real estate market and may be feeling tired after looking for so long.
As a buyer, how can you overcome real estate fatigue?
Make sure your finances are in order
Ensure that your mortgage specialist has all the required documentation. This is very important, and something that you have total control over – preparation is key!
Do your due diligence before making an offer
Perform pre-inspections and review permit history
Be prepared to make a strong offer on a home that you love
Understand that many homes are still selling subject free
Have a deposit in hand when you make the offer
If it is a multiple offer situation, do everything you can to improve your chances
Write a personalized letter that is edited specifically for the property you are making an offer on. Include a picture and note saying how much you love the home and what it will mean to your family.
Emit confidence when viewing a home. Try to introduce yourself to the listing agent and make a strong first impression so that they will remember you when going through offers.
Do not be afraid to try! Make an offer on the home that you love
Focus on market value (do not fixate on list price) to make an offer that you feel comfortable with.
Offer at a price that if you lost the property by $5,000 or $10,000, you would not be upset.
Don’t expect a call with feedback after making an offer
Not all Realtors will provide updates; you may not know how your bid is doing compared to other offers.
Be resilient! Buying a home can be an emotional process.
Try not to get disappointed when seeing a home with a high number of showings.
Know when it is time to step down if there are a lot of offers on the table. Furthermore, pick a number that you believe to be “a lot” – this could be, 6 offers or 12+ offers.
For entry priced homes, recognize that 90% of the value is in the land. Try not to get caught up in the small details of the structure if you love everything else about the property.
As a seller, how can you overcome real estate fatigue?
Listing price is more important now than what it has been in previous months
In January and February 2021, the final sale price could be drastically higher than the list price because of limited selection and multiple offers driving it up. Currently, prices are not increasing to the same extent due to the higher number of listings available. Be cautious when using the pricing strategy of listing your property low to increase interest.
Buyers may have been burned by previous offers and can be skeptical of the listing price, asking if it is where it should be or if there will be another “bidding war.”
Be careful of underpricing! In some cases, this can generate a lot of interest and encourage too many offers (most of which are not competitive).
May and June are great months for putting your home up for sale
If you are entering July and August, get more aggressive with your pricing to attract more buyers.
Some things to keep in mind for conquering real estate fatigue:
Even though it has been a reoccurring trend, not every property sells over the asking price. Every situation is different, and Realtors and their clients may be using various listing price strategies. Some listings may be priced too high or low; focus on the home’s market value and decide whether it is worth it for you to make an offer. Remember that it will most likely be a quick sale with subject-free and multiple offers if it is a conservatively priced property.
Predictability is very challenging in June compared to February of 2021. Inventory is increasing, making it tricky for sellers trying to pick a list price and buyers deciding how much they should offer.
Some buyers may be fatigued from past experiences and not want to make an offer on a home even though they can afford it.
Try to avoid the term “bidding war” when discussing popular properties. It can be a scary term that can discourage homebuyers from making an offer in fear of overpaying. Instead, use the phrase “multiple offers.”
What is buyer fatigue?
Buyer fatigue refers to buyers who have seen so many properties, written too many unsuccessful offers, and are flat out exhausted with the buying process. Searching for the dream home can be an exhaustive undertaking and when you are losing out time and time again you start to feel like you will never win a bid.
As a homeowner, the Realtor you choose to sell your home can make the difference between maximizing the sale to its full potential and leaving money on the table. In some communities, market value has gone up 20-30% since last fall. Hire a realtor who knows the value of your home and understands how to get the best offer for you.
The G+D Realtors have been noticing a shift in the number of homeowners moving to the communities east of Vancouver in search of larger properties, more outdoor space, and more affordable prices.
James and Denny compare real estate over the last ten years in two of these surrounding cities: the charming inner-city suburb of New Westminster to the beautiful mountainous city of Port Moody.
This episode will focus on peak pricing in these regions, the difference in sale prices of comparable properties, the benefits that each city offers, and where the best investment opportunities and highest rent can be found.
Getting approved for a mortgage and securing a low interest rate is an important part of buying a home.
James and Denny welcome Alex McFadyen from Thrive Mortgage Co. to the podcast for an update on current mortgage trends.
This episode will focus on who will be most affected by the upcoming mortgage stress test, the benefits of a basement suite, the qualifying process for big banks, fixed versus variable rates, the importance of good credit history, and the risks of making a subject free offer.
Many homeowners wonder what kind of renovations can be done to get the most value out of their home.
James and Denny discuss what sellers should concentrate on when planning to upgrade certain aspects of their property.
This episode will focus on knowing your time horizon, understanding the property value breakdown (structure value versus land value), the importance of good construction, and the increase in renovation and raw material costs.
If you are thinking of renovating your home, you may have some of the following questions:
What type of renovations should I do to increase my home’s value? Is it worth it to renovate my home? What can I do to decrease my chances of overspending on this project?
The answers to these questions rely heavily on how long the homeowner plans to live in the home. This can also be called the homeowner’s time horizon.
How to Effectively Renovate your Home if you Plan to Live in it for Five Years or Less:
If you plan to live in your home for a shorter period, your primary motivation should be to achieve the maximum return on your investment.
Focus on projects that will substantially impact buyers and increase interest, such as an updated kitchen, cabinets, or flooring. You want to do the minimum amount of work to make it look as good as you can for reselling.
Many buyers consider the kitchen to be one of the main selling features of a home.
The average kitchen renovation in Vancouver costs around $50,000, with prices increasing substantially for large and luxury kitchens. This price can depend on the type of materials, fixtures, and contractor you use.
Updating the cabinets and faucets can significantly modernize the space. New paint and countertops are two of the most common changes that most homeowners make. A possible item to splurge on would be a high-end faucet that will act as a statement piece and add value to the room.
The Appraisal Institute of Canada suggests spending 25% of your home’s value on a kitchen renovation if doing it for yourself. However, a homeowner should only invest 10-15% of the home’s value in the kitchen if you plan to sell. It is essential to factor in your home’s location, compare what other kitchens in similar homes look like, and your budget when planning any renovation before selling. Speak with a contractor or Realtor if you would like more information to help make these decisions.
How to Effectively Renovate your Home if you Plan to Live in it for Ten to Twenty Years (or more):
If you plan to spend a significant amount of time living in the home, invest what you can afford into the upgrades you want. The longer you live there, the more you can justify doing big-ticket items that may not necessarily increase the sale price of your home. This can include drain tile and updating electrical or plumbing.
It is important to remember that a large part of the sale price is based on the land value of that lot. For example, a post-war bungalow home may sell for $1.4 million, but the actual structure is only worth approximately $100,000 because of its age.
Furthermore, in East Vancouver, a house was recently sold for $2 million and then was promptly torn down, signifying that most of that sale price was actually for the 33-foot lot of land in a desirable neighborhood.
Real estate land value is an appreciating asset that will continue to grow as the market does. Under these circumstances, you will not necessarily need to worry about getting a significant return on your renovation investment if you plan to live in the house for a more extended period. When you finally decide to sell in the future, the land value will have likely increased to an amount that would cover those upgrade costs.
Things to Keep in Mind to Effectively Renovate your Home:
Contractors are extremely busy right now, so plan well in advance and start talking to a contractor six months to a year before renovating. Keep in mind that the cost of construction and raw materials are increasing.
City processes are also more expensive and can include costly surveys, arborist reports, and energy requirement updates. Always check in with the city to determine if your total renovation dollar amount could trigger any unanticipated required updates with the city.
Consequently, the sooner you do the renovation, the less expensive it will probably be.
We have seen this trend over the past two years in the suburbs:
Two years ago (2019), building costs were approximately $150 per square foot
In the last year (2020), the base price for building costs rose to $200 per square foot (this would be for less expensive finishes and a strict budget project)
Throughout the next three years (2024), this price is expected to increase from $250 to $300 per square foot
For comparison, the building costs in Vancouver would be approximately $400 per square foot in 2021.
Considering the Building Size When Renovating Your Home
Be cautious of your renovation spending if the home does not take advantage of the full potential of a lot.
For example, if you live in an undersized home (only takes up 60% of the space allowed for that lot), potential buyers could tear down the current building to make a larger house or split the lot. In this case, renovations are likely unnecessary, and you may not receive a return on your investments.
Moreover, there is a market for undersized entry-level homes as more people want to own a house. These potential buyers may already be stretching their finances to buy the home without the renovations. It is essential to know who your sellers may be and what they are looking for in the market.
If the house is close to or larger than zoning potential, use renovations to make it the best version that it can be. Try not to move walls unless you have to.
The value of good construction on a new or well-renovated home has room to appreciate the land value and the structure value over the next five years. There is a higher chance that the next homeowner will keep the building if it is a large house, is built well, and has a great layout.
Every home is unique and requires specific considerations. Contact us for more information on what might be the best type of renovations to get the most value out of your home.
A seller must consider various factors when selecting a listing price for their home. These factors can include market trends, time of year, inventory availability, uniqueness of the property, and the homeowner’s current financial situation.
James and Denny share their process and classification system for selecting a price point for their client’s homes.
This episode will focus on understanding what potential buyers are looking for, the dangers of pricing your listing too low or too high, the value of a great location, and the difference between pricing condos, townhouses, and single-family homes.
The strategies behind selecting a home’s price when listing is constantly changing. This process depends heavily on the following factors:
Current Inventory and Time of Year
Inventory is likely to be low in the first few months of the year. A seller may opt to list their home at a low price and then rely on multiple offers and bidding wars to increase the final sale price to a number equal to or above market value.
More inventory will likely become available in late Spring, which will decrease the amount of competition. The market is still hot during this time, but sellers will see fewer multiple offer situations.
The real estate market may begin to cool down as the year progresses into the winter months.
Know what types of homes are popular at this time. Entry-level single family homes are getting a lot of interest and selling quickly. In these circumstances, pricing conservatively can work in your favour. Mid to upper-priced homes should be listed at or above market value. This can give the homeowner some wiggle room to negotiate price if needed.
If you have already bought another property and need to sell your current one quickly, the best option in most situations is to list your home just below recent sales. This strategy will increase interest and hopefully secure a quick deal.
If you are selling your home and want to achieve a goal number to buy another property afterward, price it at a number you feel comfortable selling it for. In this circumstance, do not expect a bidding war to push up the price.
Current Strategies for April 2021
Underpricing your listing is a riskier strategy now than it was in February or March.
For example, in March, a homeowner may list their $1.5 million home for $1.399 million to get more interest and offers. In the recent market, there is less competition to drive up that price, so it is most likely the best idea to price it at the value you believe it should sell for.
If a homeowner decides to list it below its value to increase the attention the home receives, give it at least six days on the market before looking at offers. It is also important to understand that you may have to relist your home at a higher listing price down the line if you initially do not get the offer price you desired.
The Classification System for Pricing Strategies when Listing
When selecting a listing price, G+D classifies townhouses and single family homes into three different categories:
A – a great house with a fantastic layout on a prime street in a desirable neighbourhood
B – a good house on a less favoured street in a desirable neighborhood
C – a house with a poor layout or in need of renovations on a busy street
Currently, you can still get away with a multiple offer strategy (listing low and expecting a bidding war to raise the final sale price) for a home in the A classification group.
The low B and C classification group homes should be listed at the price you think the property is worth. There will be more products available in these groups so the competition may be lower.
Condos follow a different system when selecting a listing price:
The real estate market for condos is more price-sensitive and budget-conscious. Many buyers have a strict ceiling for the maximum price they are willing to pay. Because of this, homeowners have to be very cautious with their choice of listing price – they could list low to get more eyes on the property or stretch above the last sale price to encourage a higher offer.
The neighbourhood plays a huge role when selecting a listing price for a condo. Communities within each city are following different trends. In most cases, sellers should list their condo at the price point they want to sell it for. If it is a unique property with a great view or if it is a prime building that has not seen inventory in the last couple of months, you may be able to price more aggressively in the hopes of attracting more substantial offers.
Lastly, if you have a tenanted condo, try not to overprice it as it will most likely not outperform other available apartments for sale.
Planning a Pricing Strategy when Listing your Home
It can be challenging to choose the best price when listing your home. When trying to determine the value of a home, James and Denny go through the following processes:
Dig deep into the history of similar properties in that price point
Ex. Review prices of all 2002 condo sales
Review the sales in that area for the last 3 to 6 months
Ex. All sales in that building or complex
Break down the sales from the previous 30 days
Ex. Look for sales for the specific price range that you are thinking of selling at and compare them to your property
When choosing a listing price, it is essential to have a thorough understanding of the product and how properties at that price point have recently been performing in the market. Keep in mind that every home is unique, and it is best to speak with a Realtor who can help you find your home’s market value.
Do you have questions regarding current market trends in your neighbourhood and what your home could be worth? Contact us! We would love to help you maximize your property’s value.
As more inventory becomes available, many homeowners are asking what they should do to maximize the value of their home before selling.
James and Denny stress the importance of timing when it comes to listing and share their experience with renovation delays and finding a good contractor.
This episode will focus on the renovation types that will give you the best return, the surprising costs of renovations, the effects of increasing inventory, understanding what your buyer is looking for, and the high impact of new paint, flooring, and landscaping.
Many homeowners are willing to invest money into their property to maximize its value before selling it. However, various factors can influence the types of renovations you should focus on and the timing behind when the work should be completed. In some cases, it may be better to sell the home as is and not perform any renovations at all.
As a seller, it is important to follow the real estate market trends to ensure the best return on your investment.
When should you renovate your home before selling?
Timing is essential.
The real estate market is likely to be very busy during the spring months. This is a great time to sell your home because inventory is generally lower than the summer, and competition is higher for buyers. During this time, if you have to renovate, it is crucial to do work that has a maximum effect and will only minimally delay your ability to list. Try to focus on small renovations that can significantly impact buyers’ opinions of the home, like new flooring, fresh paint, and updated landscaping. Doing a general clean-up and decluttering of common spaces can also have a substantial impact.
November and December are slower months in real estate. Buyers are generally not as interested in purchasing a home during this time of year, which means that it is a great time to perform extensive renovations. These renovations can include big-ticket items like the kitchen or bathrooms. The completion of this work will likely line up with the springtime rush and can give your home a step up compared to the competition.
What are the main factors you should focus on when planning to renovate your home before selling?
If you are hoping for a quick renovation and a high return on your investment, focus on:
New paint and flooring:
This work can be less labour intensive and expensive but still have a significant impact. Furthermore, you do not need a contractor for these updates – the homeowner can hire floor installation professionals when purchasing the material or professional painters.
James recalls when he was selling a late 1990’s New Westminster condo that looked a little outdated. He spent approximately $5,000 on new floors and paint and made an extra $10,000 when selling. In some cases, it can bring you a two to one return on your investment.
Decluttering, tidying, and minor fixes:
When buyers are walking through a home during a showing, they should get the impression that the property is well maintained. Broken window screens, leaky sink taps, messy rooms, and dirty floors can give the buyers the idea that the house is not adequately cared for. Consequently, buyers may question what else needs attention or repair.
This step can cause an increase in curb appeal and improve the first impression that buyers will have of the home as they arrive. Landscaping can include cutting the grass, trimming hedges, tidying pathways, or planting flowers for pops of colour.
Showrooms can be a great source of inspiration for condo updates. Developers are budget conscious and create the best space for the lowest price they can.
Location is key! Suppose your condo is in places like Kitsilano, downtown Vancouver, or the west end of Vancouver. In that case, luxurious renovations could get you a higher return on your investment because that is what buyers are looking for in these places. Knowing who the potential buyers will be can help direct you towards the renovation projects you should focus on.
Finding a good contractor that you trust to do the renovation work can also be a challenge. Most contractors are booked 3-6 months in advance, and some of the larger projects can take a long time to complete. Keep this in mind when you are planning any work on your home. Always remember that timing is crucial in real estate.
What are some of the things you should stay away from when planning to renovate your home before selling?
Always keep in mind that tile can be costly. When renovating a bathroom, opt to insert a fiberglass shower base instead of a tile base. This alternative will lower the total cost of renovations.
Furthermore, choose a neutral tile that the majority of people will like. Remember – you are renovating your home for the potential buyer. Do not choose something expensive and flashy that only caters to a specific taste.
Installing a fancy shower with many different showerheads and extravagant features can be a turn-off for some buyers. Focus on the type of clientele interested in your home and try to cater to them.
Making extensive and luxurious renovations in a condo can be a risky situation. Many homebuyers are budget conscious when looking to buy this type of property.
It is common for many homeowners to overspend on condo renovations. Please speak with a Realtor before making any extensive changes to increase sale value. It is common for many homeowners to overspend on condo renovations and then just break even or lose money on the project.
More lighting is not always better! Try to be strategic with placement and tasteful with the choice of light fixtures. Keep in mind that many buyers may not want multiple chandeliers or a living room ceiling full of pot lights.
Appliances are hard to get more than a one-to-one return on your investment. As a seller, try to be brand conscious and always keep in mind what your buyer would prefer. For example, do not splurge on an expensive fridge with a TV screen when your buyer may not be looking to spend the extra dollars for that type of luxury.
Deciding when and how to renovate depends entirely on the situation
If it is the spring and the market is hot, the best decision is most likely to get your home on the market as soon as possible. If it is later in the year and the market has cooled down, turn your attention to what you can renovate to increase the value of your home for the next busy season.
Keep in mind that renovations can be expensive and take time. If you feel comfortable with construction, you can do a lot of the work yourself and save some money. Take into account that if you are waiting for a contractor, it could take up to 6 months.
Consider these factors before planning to remodel your home. Please consult your local Realtor for more guidance on whether or not you should renovate your home before selling.