MYTH-BUSTING: COMMON QUESTIONS ABOUT SELLING AN INVESTMENT PROPERTY Our local real estate market is evolving at a rapid pace every day. The high activity level makes it quite difficult to stay on top of current trends, monthly/weekly statistics, and recommendations for investing, disposing of properties, or leasing new ones. This month, The Westside Partners of TrilliumWest are going to take you through nine common myths when it comes to selling an investment property in our local market. Enjoy!
1. We Don’t Need A Realtor, We Should Just Sell Privately!
We totally understand, why should you give up some of that hard earned equity in your home, to sell with a Realtor? Let’s have a look at three main factors; 1) The majority of Buyers in this market are going the broker protected route. In the KW condo market, from March 31st to April 9th 2021, over 70% of sales were facilitated with a realtor, when comparing the land registry sales record versus the MLS sales statistics. 2) A highly experienced, hyper-local, extremely knowledgeable, and trustworthy Realtor is worth their weight in gold. They are fully in tune with the market, know how to MacGyver any changes in market conditions, and will keep you competitively aligned with using all possible resources at their disposal. “Saving” $10,000 on professional Realtor fees, could be a $20,000 mistake, we’ve seen it happen. 3) Ask your accountant for further taxation advice, as we know some of our Investors are eligible to write off Realtor Professional Fees, or the HST paid, as a Capital Expenditure.
2. Home/Condo Staging Is Not Worth The Cost, Properties Sell Themselves!
Not so fast Mr. or Ms. Investor Seller client! What is typically going to help you achieve the highest possible sale price? Having the property vacant, so potential Buyers can spend most of their showing trying to guess where all their furniture goes? Or, from the moment a potential Buyer walks through the property, they immediately can picture themselves living in the home, emotions start to take over with how beautiful the property looks versus the other 600 places they looked at before seeing yours? Let’s look at some data: We pulled the April 2021 Semi Detached sales within KW, and found 6 (obviously) staged properties, and 4 vacant ones. The median sale price for the vacant properties was $547,000 and the staged ones were $691,000. The median days on market were identical, which is interesting as more expensive properties typically take longer to sell. As more data becomes available, we are noticing a trend with the success of wellstaged properties on the market.
3. If We List For 399K, We’ll Definitely Start A Bidding War And Get Our 600K Sale!
After a year of these marketing manipulation games, we believe the underpricing show is finally coming to an end. Buyers are aware of these tactics, and now the data shows that purposely (sometimes dramatically) underpricing a property could undermine your ability to
achieve the best possible sales result. Let us elaborate: You have a property with an estimated market value of 600K. The listing goes up for 399K and offers are held in 2 weeks. A flood of showing requests go through, and you’re feeling really good. Offer day rolls around, 3 offers come in (not 20) and none above 550K. Most of the Buyers were not willing to play your underpricing game. You reject them all, now what!? Well, lets just re-list the property and try again, right? Wrong, the majority of those potential Buyers have moved on to a different property and now with a cancelled & re-listed property on record within the MLS, the Investor Buyers will start to move in on your listing, trying to strike a deal. Can you imagine if you went into Walmart, brought a bag of chips to the checkout, and the cashier said “Sorry, the Store Manager is actually hoping to sell that bag of chips for $5, not $2.99”. You’d be a little miffed too, wouldn’t you?
4. We Can’t Sell With A Tenant Due To The “Eviction Freeze”!
While the Ontario government has put a temporary hold on residential evictions in Ontario to protect the health and safety of tenants, this doesn’t mean you have no options for selling your home. If you have a rental property currently tenanted, you can sell that property to another investor and have them assume the tenants as a part of the agreement for sale. Tenanted properties are actually sought after by some investors when immediate income and turnkey traits are a priority.
5. It’s Our House! We Don’t Need To Give 24-Hours Notice.
The Ontario Residential Tenancies Act specifies the requirements and responsibilities of both tenants and landlords within Ontario regarding residential leases. Tenants have a right to 24 hours advance written notice of the landlord entering the unit for things such as repairs, inspections, or mortgage and insurance representatives who require inspecting the property. The only reasons a landlord can enter the unit without 24 hour advance written notice is in the case of an emergency, the tenant consenting to the landlord entering at that time, scheduled cleaning between 8:00am and 8:00pm agreed upon in advance by the tenant, and showing the unit to a prospective tenant if, among other requirements, the tenant has been informed at a reasonable time prior to the showing and having it occur between 8:00am and 8:00pm.
Wanna chat further? 42
Email us at homesplus@westsidepartners.ca
