By Gareth R. Jones
Today’s real estate market prices are lower. Today’s interest rates are lower. Today’s inflation costs are lower. Why aren’t people buying? Answer: They are.
With being in the mortgage financing business, I constantly have the opportunity to speak with Realtors and with Buyers/Borrowers. Without fail, the most common reason given for not purchasing a property visited can be categorized as “lack of perceived value”
When asked common questions, Buyer/Borrower’s respond overwhelmingly with the same comments such as:
- “Great house, great location but doesn’t have_____!”
- “We would buy that house if we didn’t have to spend $XX on _ _ _ _ _ immediately!!”
- “If we have to pay for immediate updates and improvements on credit, we cannot afford to buy the house! The monthly payments will become beyond our reach!!”
As Seller’s you must realize that you are selling a dream to the Buyer. If Buyers walk into your house after providing their Realtor with a specific list of features sought, only to find the features are there but many need renovating, replacing, repairing, reconditioning or removing, the dream has all but disappeared. Most homebuyers seek houses in the maximum of their affordability range and expect the property to be in move-in and outstanding condition. They generally do not anticipate the costs of time, money and inconvenience required to bring the house up to their expectations. Furthermore, the vast majority of Buyers cannot see beyond cosmetic requirements and renovations to enable your home to become their dream home.
As Sellers, it is very easy to be complacent about our current home, believing that our house is the best value out there. If it was, it would sell and possibly with multiple offers!! We become house proud of all the features that are in our home, such as: 4 bedrooms, 3 bathrooms, eat-in kitchen, family room, central air and vac, fireplace, hardwood floors, broadloom, finished basement, 2 car garage, and private drive. These are all common items requested of Realtors when meeting potential buyers. Realtors then narrow their search down to properties containing these features in geographic areas of interest to their clients.
The following will describe by item what is commonly found after the search has been narrowed down and appointments for showings booked:
- 4 bedrooms: carpets worn out or dirty and paint colour choices far from neutral
- 3 bathrooms: tiles and vanity are old style, chipped and poor condition, old fixtures or inserts
- Eat-in Kitchen: old flooring, cabinets and counter tops, poor lighting
- Family Room: well worn carpet, windows and coverings dirty, odour
- Central Air and Vac: over ten years old, short life expectancy
- Fireplace: has not been cleaned, front surface smoke stained, burns on rug (safety issue)
- Hardwood Floors: need refinishing or replacing, excessive squeaking
- Broadloom: old, worn, dirty or poor choice of colour
- Finished Basement: poorly constructed and laid out, dysfunctional
- 2 Car Garage: doors not working correctly and used as additional storage only
- Private Drive: old asphalt with cracks and holes
You can see how disappointed the prospective clients are when they arrive with certain expectations. Above describes the surface faults and does not describe other areas of concern such as roof, structure, bricks, plumbing, electrical or landscaping.
You are selling a dream not a project for new Buyers. New Buyers cannot and usually will not take on major overhauls or renovations, especially if inexperienced.
Today, there are no longer reasonable excuses for selling a home as described above. There are many tax saving government incentives and grants for energy efficiency on insulation, doors, windows, roofing and also most general improvements.
Many Lenders are offering fully open, low cost Lines of Credit or other refinancing options to qualified clients in order to facilitate their needs.
Your Realtor is able to provide you with outstanding statistics on return on investment (ROI) for clients making these improvements to their property.
As a Mortgage Agent, I am able to provide you with outstanding financing options from numerous lending sources.
Pleasant dreams!!
Gareth R. Jones A.M.P.(FSCO Licence #M08009150) is a Mortgage Agent with Home Loans Canada- (the Brokerage arm of CIBC Mortgages, Lending and Insurance). FSCO Licence #10423. Gareth can be reached at Gareth.Jones@HLCmortgages.com.
