Winnipeg's Real Estate Blog

Selling your Home on your own? The Market IS Changing!

Update for October, 2008

"The Market IS Changing!"

By now everyone has heard about the US market and housing melt-down.  While we here in Manitoba are somewhat insulated from this, we are beginning to feel a change in the market.

Houses which were getting multiple offers, are now selling at 'list price', and other are taking longer to sell.

The first ones to feel the pinch will be (and are) the Private Sellers, who for years have been told that its 'easy to sell your own home'....you don't need a Realtor." 

Well, for years it was easier, mainly because there were so many buyers out there.  Once the flood of buyers has started to slow down, the remaining buyers now have a choice of homes to look at, and are doing so WITH A REALTOR.   Having a choice means "Less Competition", and so these buyers are no longer forced to consider the often overpriced, always inconvenient alternative of "private sales".

The time of being able to sell a house by simply 'plunking a colorful sign in the ground' is coming to an end.  This may have worked for some homes in a market which was flooded with buyers.  But in a more level market, where buyers no longer outnumber sellers by 10-to-1, finding the right buyer for your home requires a little more than a spot on the internet and a color ad in a magazine.  It requires teamwork and an organization with a proven track-record of over 100 years of success and service.

That type of teamwork is available ONLY thru a Realtor.  By listing your home, you will immediately gain access to all 1400 Realtors in Winnipeg, and all of the buyers working with them.

So if you are considering spending $700 on a Do-It-Yourself kit, please think about this:  Buyers who are looking for a house on their own will ALWAYS look at a "Listed House" (listed with a Realtor), but buyers who are committed to working with a Realtor will almost NEVER look at a "Private Sale".  Get access to ALL THE BUYERS.........List with a Realtor!

For a look at my marketing plan for YOUR home, click on  Marketing Plan

Open Houses: Do they produce results?

With the spring market comes new listings for homes, and Open Houses to bring buyers into the house.  This strategy (holding Open Houses) is a favorite of "Private Sellers"  who are being told that this method is a great way to showcase the home.  But is it?  Lets take a look at some stats:

The National Association of Realtors has conducted a study and discovered that 1-in-400 visits to an Open House results in a sale.  One-In-400???  Great odds if you're playing the lottery, but for selling a home?  By contrast, in Winnipeg, approx. 1-in 5 showings by a Realtor results in an offer.  In other words, for homes that are priced accurately, 20 showings by Realtors should, and in most cases will, produce between 4 and 6 offers on that house.

Putting Boots on the ground in your home:  No doubt that Open Houses attract a large number of visitors!  But consider this: When home-buyers first start to look at homes, they start out by going to Open Houses (especially Open Houses at Private Sellers), because they feel there will be no pressure on them, no committment!   Since they are not ready to buy (we're 'just looking', thanks), they do not want to be contacted by a Realtor, or give out their personal information.  This also means that the vast majority of Open House visitors are simply not ready to buy..... they really are 'just looking'.  There is certainly nothing wrong with that, but is this really what the homeOWNER needs?

On the other hand, once buyers are ready and committed to finding a home, most of them will work with a Realtor.  In doing so, they become pre-approved by a bank and are truly ready to buy NOW.  So the 20-or-so showings a home gets via Realtors are far more valuable than getting 50 visitors to an Open House. 

As an anecdotal story, I can point to a recent Open House in Linden Woods.  During the week, 12 Realtors showed this home, and during our Open House we had 20 couples come thru the house.  None of the Open House visitors wrote an offer, but 2 of the buyers with Realtors did!

So if you are a home-buyer who is just starting to look and want to get a 'feel for the market', Open Houses are a great way to start.  You may find however that, depending on the homes' location and price, you end up rubbing elbows with 30 other Open House Visitors, and may decide that this is not an enjoyable way to shop.  Consider that, if you are working with a Realtor, ANY home can be an OPEN HOUSE, ALL the time.

But if you are the Home OWNER, throwing your doors open to anyone with no more motivation than a few spare minutes to kill, might not be the most valuable strategy.

"Free 'Over-The-Net' Home Evaluation: What are they worth?

Over the past few years, advertisements for "Free "Over-The-Internet" home evaluations have increased in frequency.  Some ads even offer to do the evaluation based on only your postal code.  Recently, a home-owner made such a request of me, wanting an evaluation without my actually attending the home in question.  This has caused me to consider this issue and write about it.  Let's take a look at how value is determined in the first place:

The Owner sets the "Asking Price",....the Buyer determines "Value":  This adage is very true.  Quite frankly, the buyer does not care what the owner (or his agent) want for the house....buyers still shop the same way they always have, by comparison.  No one is likely to buy your home off the Internet, they have to come out and see it.  Makes sense, doesn't it?  So how could an evaluation, over the Internet and without physical examination of the home, be of ANY value? 

To make matters worse, there are now companies which have nothing whatsoever to do with Real Estate, but have been advertising these 'free evaluations'.  Once the home-owner contacts them, these companies then sell your information to a real estate agent who still has to come out and see your home to provide any useful appraisal or opinion.

So, best-case scenario is that the would-be seller (who asks for an over-the-net evaluation) ends up being contacted by a real estate agent who still needs to come out to the house anyway.

Worst-case scenario is that the home-owner ends up communicating with an "Internet Lead-Generating" company, who simply run an advertisement business and then sell your info back to an agent who is willing to pay for it.

Bottom Line?:  If you're thinking of selling your home, call a qualified Realtor directly.  Perhaps choose the one who sold you the home in the first place (if you can remember who that is), or pick one off a bus-bench, out of a Real Estate publication, or any other method you choose.  At least that way, YOU choose the Realtor.

Private Seller: You CAN sell your home by yourself....No, really...!

It's a fact.  There is no doubt that our (Winnipeg) market is so fast, you really CAN sell your home on your own.  There is no question about that!

The question is not "CAN you sell on your own?",  the real question is "SHOULD you try to do so?"  Let's take a look at a couple of options for the home-owner in our hot market:

The first (and cheapest) method is to go to the local hardware store and buy a "House 4 Sale" sign.  Investment level: around $10.00  Our market is so fast, that within a couple of days, you will have people coming to your door, or calling your phone, asking to see your house.  You may manage to sell it this way.  However, since the advertising is limited to only those people who happen to drive by your home, are you reaching the entire market?  I think you would agree that this is not the case.

So, option #2:  Buy a "Do-It-Yourself kit"   from a private-sales assistance company.  For an increased investment of around $700, you get an ad in a magazine and a spot on a website.  While they promise "Support for a Year", the printed ads themselves only last a few weeks.  And why would they need to 'support you for a year?'  In a market where the average home (listed with a Realtor)  sells in around 3 weeks, can you imagine being for-sale for a year?   However, we can see that for the extra investment, the home-owner is now able to reach a larger audience....thats the whole idea behind marketing. 

Marketing Works:  Think of the #1 soft-drink company in the world!  The top auto-maker, most popular brand of tissue-paper, soap, toothpaste.... ANY product you can think of.  All have something in common:  they market their product.  And we know that marketing produces results:  why else would they spend the money to do so? 

Your Home is a Product:  Your home, although unique, is still a product For-Sale.  The same principles of marketing apply:  reach more people and you increase the chances of selling at top-dollar. 

So if we are comfortable with the idea that "marketing works", why would we believe that the above-mentioned advertising package is all we need?  Are they reaching the 'entire market'?  What about the buyers who work with Real Estate Agents?  What about the buyers who are being transferred to Winnipeg from out-of-province? 

Option #3:  "Listing your home with a Realtor on the MLS".  Here are some of the benefits of doing so:

1. Instant access to the 1400 Real Estate professionals in and around Winnipeg.  EVERY Realtor can show and sell EVERY listed home.
2. Instant access to the thousands of pre-qualified and motivated buyers who are working with those Realtors now.  These really are the most serious, financially capable buyers in the marketplace.
3. Instant coverage thru the M.L.S. across North America

It is one of the basic laws of economics: supply and demand!  The homeowner has a product, and by exposing that product to the entire market, we can be sure that the most motivated buyer is located.

So, yes......you CAN sell on your own!  ... unless you want to receive the most money this market will bring for you!

Also read:

Why Home-Buyers work with a Realtor!

Fix-Up Before Selling: A little investment can pay off BIG for the home-owner

Currently, Winnipeg is experiencing one of the hottest "Sellers Markets" in the country.  This is a little bit of a double edged sword:  homeowners are sometimes a little over-confident when it comes to pricing and selling their homes.  After all, we hear about the 'bidding wars',  and the stories of homeowners getting 30, 40 or 50 thousand dollars above their 'asking price'.

Here is an interesting fact to keep in mind:

Winnipeg's List-to-Sales ratio is around 75%.  That means that 75% of listed homes sell within their listing period (usually around 3 months).  The other side of that equation is that 25% (1 out of 4) don't sell.  Main reason for this: Over-pricing of the home.

Over-Pricing:  Buyers in Winnipeg have become accustomed to the idea of paying more for a house than the owner is asking.  So when buyers see a house that is already over-priced, they naturally make the assumption "We have to pay MORE than they are already asking?"....and in many cases buyers move on to other homes.

This over-confidence often leads to a 2nd failing:  the "sell-as-is" mentality.  Sometimes homeowners feel that since the market is so hot, anything can be sold.  As the 75% ratio shows us, this is not always true.

What do buyers look for?  Extra clean, ready to move homes.  In fact, they will pay extra for it.  The owner is well advised to spend a little on paint, carpet and modern lights, at the very least.

For some excellent ideas in fixing-before-selling, read

Market Value Boosting Renovations

Home Staging: Benefits for the Home Owner

Home Staging can take many forms: from simply 'de-cluttering' the home, to painting and replacing carpets and all the way up to actually renting high-end furniture.

In it's simplest form, (de-cluttering), home-staging will improve the look and feel of the home, creating a feel of space and cleanliness. It is always recommended that any obvious flaws, such as poor paint or worn carpets, be replaced and/or repaired.

Lights are a very important factor when showing a home. Modern lighting does not have to be expensive, but bright lights improve the look and feel for many homes.

Why is home-staging so beneficial: Buyers spend, on average, 15 to 20 minutes in a house and need to be impressed. A buyer may go out one afternoon and look at 4 or 5 competing homes. Since he/she can not buy all of them, they are really looking at which ones to eliminate from their list. Wow them when they come to your home. Impress them with cleanliness, space and warmth, and your home will stand out in their mind.

Buyers are willing to pay extra for that 'ready-to-move' condition, so any improvements (within reason) you can make, will be well rewarded.

I have the fortune of working with a great home-stager, Leesa Johnson of Beyond Belief Home Staging Services. Her website at www.bbhomestaging.com has some excellent before-and-after pictures. Leesa tells me that in Ontario, estimates are that 1 in 4 homes which sold, had been staged.