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The Vancouver Westside Single Family Market has changed. We have a 15% tax on foreign buyers. We have a vacancy tax to homes that are not occupied. We have very few sales and little inventory. We have high city assessed values because assessments were do in July last year and they are no longer relevant. This gives sellers high expectations on the price of their homes. We have changing rules around mortgages and lenders are stress testing mortgages by looking more closely at income. It is no longer enough to have a large down payment.
Sellers are holding on to a past construct where buyers will come no matter what they price their homes at. This has worked in the past because market values eventually caught up with the sellers prices. Some realtors are doing a poor job educating their clients on market values and think it is enough to just take a listing at any price and put up a sign on the property to sell a home.
Here is my take on how Sellers could deal with this changed market and the 3 things that I would suggest:
Now more than ever, it is important to price your home as accurately as possible right from the start. Remember, because market values is not longer rising, sellers should try to get under the market and price at or a little bit lower than the last comparable sale. If a seller wants to try a higher price, they should be willing to adjust price within 2 to 3 weeks of the listing hitting the market if an offer is not received.
Be willing to look at offers that are subject to the sale of another home. The Vancouver Westside Single Family Market has essentially stalled. Seller’s are hesitant to list their homes on the market, because they can’t find something suitable to buy due to the lack of inventory. Buyers are hesitant to buy because their is little choice and they don’t know where the values are because there are very few sales. A subject to sale offer solves these issues by giving a buyer certainty that they will have time to sell before buying. That being said before accepting a subject to sale offer, make sure that the buyer has their home priced accurately.
Take a deposit upfront. In the past when a subject offer is made the deposit would be due on subject removal. If a seller wants to know if a buyer is serious about buying their home, take $10,000 – $15,000 as a deposit as soon as the offer is accepted. Although this money would typically be refundable if subject conditions are not removed, it makes the buyer go through the process more seriously and as a seller you are much more likely to the subject conditions removed. If anything psychologically it makes the buyer more committed to moving forward with the purchase.
If you are interested in learning more about the Westside Single Family Market or other markets in Metro Vancouver, I have a great stats package for both condos and single family homes for all areas including Richmond, East Vancouver, North Vancouver, West Vancouver. You can download this package of information by clicking on the link in the description.