Real Estate Talk:
Post pandemic pricing

The situation has changed since COVID restrictions have been lifted

By Joseph Marovitch

August 4, 2021

Once again, I met with a client who told me the market is hot and, therefore, I should price their property double what the market indicators will bear. As a responsible broker, I indicated that market inventory is increasing, which will cause prices to normalize. I did agree to place the property on the market at the inflated price with the understanding that, after 30 days, we would examine the number of clicks on Centris and the number of inquiries and visits, to see the level of interest at the stated price.

If the seller is correct, there should be many inquiries, hits on Centris, visits and an offer or two. If the seller is wrong, there should be many hits on Centris but few inquiries, indicating an interest in the property but not at the current asking price.

Without the fear of infection, people are frequenting bars and restaurants. People are shopping, and people are selling their property. This means there will be more property for sale.

The problem with this strategy is a month is wasted as qualified and motivated buyers pass on the property. As well, brokers with buyers will use an overinflated priced property to assist in the sale of similar properties that are more accurately priced.

The situation has changed since restrictions have been lifted. Without the fear of infection, people are frequenting bars and restaurants. People are shopping, and people are selling their property. This means there will be more property for sale. With increased inventory, there is more choice, and buyers can be demanding. Buyers will no longer be competing as fiercely as they have in the past year. Buyers will no longer waive the inspection, which by the way, is never a good idea.

To achieve the best sale price possible, a good strategy is to target-market the property to the right audience and as many buyers as possible. Some sellers tell me, “We just need the right buyer”. A seller needs as many buyers as possible. The more, the merrier. A property put up for sale requires full exposure to the right audience. A residence is unique. It is not a can of tomato soup on a shelf of a hundred cans with a fixed price.

Real estate subscribes to the economic law of supply and demand and even in a market with many homes for sale, a seller must make the property as attractive as possible to beat the competition and drive the price upwards. Therefore, the strategy to sell must include, aside from great photos, a clear and inviting description, a creative presentation, proper pricing.

‘With increased inventory, there is more choice, and buyers can be demanding. Buyers will no longer be competing as fiercely as they have in the past year.’

To properly price we must be aware of the competition. If a home is asking $600,000, for argument’s sake, see what else a buyer can buy for $600,000 and be objective when researching, or trust a professional to price the property. A professional broker will not see the property through adoring eyes with years of memories. A broker will be objective with one goal, to sell the property for the highest price possible in the shortest amount of time.

In a pre-evaluation, before a site visit, a property with specific criteria in a certain location can be placed on a price scale for the area the home is located. On average, the best point to place the price is between the middle and high end of the scale, assuming the property is in good condition. This point will enable the seller to generate the most interest and raise the price buyers will offer.

For further information on pricing, market strategy and the selling process leave your comments below or feel free to contact me. Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: How important is resale consideration when buying?

State of the market

The question of the week is: Will prices fall due to more inventory? No, as long as we have the pandemic under control. Interest rates and inventory should rise. Multiple offers will cease to be as prevalent, however, prices will not decrease. Montréal is an island running out of space and expanding beyond the Saint-Lawrence river. Prices will continue to rise, not as fast as during a pandemic, but they will go up.

‘… most of Quebec is vaccinated, therefore, the market will move forward, possibly making us one of the best locations to invest in real estate.’

Many in Quebec do not trust the vaccines, however, most of Quebec is vaccinated, therefore, the market will move forward, possibly making us one of the best locations to invest in real estate.

Have a great week!

Let’s not forget that people with cancer are vulnerable too!

You are invited to keep giving to the following organizations since it’s now more important than ever to support cancer research! Click on the logos below to find out how:

Image: PxHere

Other articles by Joseph Marovitch