Here we are, the days are getting longer, the snow is getting deeper and we are all just aching thinking about spring. I even watched some golf on TV the other day to remind myself there is green and goodness left in the world! As spring approaches, sooner or later (depends if you listen to rodents or not), so comes the fastest moving and most lucrative market of the year. Don’t get me wrong, much like the highway, there are always people on the move – but rush hour is rush hour undeniably! This spring the more people I talk to about selling houses the more I hear a couple of interesting things:
- I hear people say “there has been a house listed on my street for 8 months now, I want to wait and see what happens to it before I decide if now is a good time for me to start thinking about a move.”
- I hear a lot of “They say prices have dropped a ton since the market ended last spring, I won’t sell if the prices are down.”
- In addition to these I hear a lot of people who have an extensive list of things, that all stem from the same place – fear of making a wrong decision at the worst possible time.
So, let’s look at these topics and decide on their merit:
- If a house in a neighbourhood is listed for more than a couple of months, there are always questions. First and foremost, is it overpriced? Typically that’s the easiest answer, anything; houses, cars, clothes, food – doesn’t matter – it’s all only worth what someone is willing to pay for it! Coming out of the market we left, into the ‘fixed’ market we have, tells me immediately that these owners listed in July last year, right on the heels of our wonderful sellers market and they were late getting there but still hopeful. They are obviously not motivated, at this point they are looking at a market that is easily 25% under where they listed and they have dug in their heels on price but that glimmer of hope remains so they keep it listed. Which may beg the question why does an agent keep the sign on the lawn knowing it won’t sell? Quite simply maybe someone will call, and if they call and don’t want that house maybe they will want another one, so everyone keeps a little hope alive. Why would you wait on the house with a proverbial flat tire to move when your opportunity has nothing to do with theirs except being in close proximity?
- The funny thing about prices, up or down makes no difference! The market you sell in and the market you buy in will the same priced market. Let me show you… So Jan 1st, 2017 mom and I list your house (3 bedroom bungalow with detached garage in Bradford) and we sell it for $750,000. You only have a $125,000 mortgage left, but would love a new SUV and have never gone on an all inclusive family vacation. We go shopping for a house, your family has grown where a 4 bedroom 3 bathroom 2 car garage 2-story home in Newmarket is where you want to be, asking price $975,000 (and we all know that they were selling at list or more at that time). So the house sold for $1,050,000, and you are in a beautiful newer home, one that you have a lot of equity in with the money you made on your previous house but still have a lot of mortgage. ($750,000 – commissions, lawyers fees, moving expenses, mortgage, etc. $185,000 = $565,000 your cash on hand) New house ($1,050,000 – (downpayment $500,000 (so you got a new SUV and took a family vacation, good for you!) = $550,000 left to mortgage)
OR… We list your bungalow March 1st, 2018 to sell it, prices are way down!!! We are talking 30% down, so now your home sells for 30% less or $525,000, still have the same $125,000 mortgage! Fortune smiles upon us and the EXACT house we bought last year we can buy again this year, but this year it too has felt the pressures of a softer market, we get that house for 30% less or only $735,000. So we keep the process alive, ($735,000 – (new SUV and vacay, mortgage et al) $250,000 (same as in above example) $275,000 down payment for the new place – $735,000 purchase price, $275,000 down leaves $460,000 mortgage)
So yes, the numbers aren’t as impressive, no you can’t say you made as much – but you still end up exactly where you want to be with a new SUV and a stamp in your passport, some walking around money in your pocket (that wasn’t there last year was it?) and it looks to me like $90,000 less owing to the bank! When prices are down, they are down to sell AND buy – when and what your neighbour sold last month or last year, that was then and they bought in the same market they sold. Don’t let their choices dictate yours.
Jan 1st, 2017 March 1st, 2018
Bradford Newmarket Bradford Newmarket
sale price $750,000.00 $1,050,000 $525,000.00 $735,000.00
mortgage $125,000.00 $125,000.00
R.E. fees 0.05 $ 37,500.00 $ 26,250.00
car and vacay $ 65,000.00 $ 65,000.00
incidentals $ 22,500.00 $ 22,500.00
downpayment $500,000.00 $ 500,000 $286,250.00 $286,250.00
Walking around $ $ 11,250.00
new mortgage $550,000.00 $460,000.00
- Oh the fear, fear of Donald Trump, of Justin Trudeau, Kathleen Wynne, fear of gas prices, fear of the changes in the National Anthem, the stock markets, job security, a long winter, a cold spring, a hot summer, RRSPs, Taxes, the list of things that create fear, that inspire conspiracy is literally endless. I can tell you one thing for sure, there will never ever be a time when there isn’t some prevailing influence that can affect your life that is out of your control! I won’t be all cliche and say that fear is all in your mind, and you just need someone to trust – you trust us to do a good job, to respect and treat you fairly. Just because we do these things, doesn’t mean we can control the external influences of the world, what it does mean is you won’t have to face them alone.
So the spring market is a fixture on the horizon, I am sure it’s going to be an exciting one, and I think the important thing to really think forward on is that understanding that: although we compare (CMA) to others that have sold or haven’t, this is a guideline and not unlike decorating or the car they drive – people makes their choices and you control your own, don’t choose to let them control yours. When you want someone in your corner for the long haul, you know where to find us, mccarthomes.com