You’d think that after 25+ years in this business I’d know it all, but the longer I’m in this business the more I learn. One of the most important things I’ve learned is that experience really is invaluable in this business. And what’s the point of all this knowledge and experience if I can’t use it for good? So here’s a story about our clients, Lars and Lisa, which has some lessons that might help you when it comes time for you to move. Names, prices and addresses have all been changed, as usual.

Lars and Lisa recently decided to move. As they were going through the process of buying and selling, several “teachable moments”, as they’re sometimes referred to when we pass along the wisdom of the ages to our children, presented themselves in a way that made me feel I was living in an instructional video.

Lars and Lisa contacted us in January 2018. They lived in a detached house and were ready to downsize to a condo. They wanted to know the value of their home. We told them their house was worth about $1.45m. They told us that, based on this value, they wanted to spend $1m on a condo. We talked about buying or selling first and suggested they start by speaking to their bank or a mortgage broker.

They found out they weren’t in a position to obtain bridge financing if they bought first and their home didn’t sell in time so they had to sell before they bought.

Lesson 1: Your first step should be to get your finances in order to avoid doing something that will put you in financial trouble.

If Lars and Lisa had bought first, they would have been under severe pressure to sell their home in time and might have had to accept a very low price to do so.

We then suggested they start looking at condos. We didn’t want them to sell their home before looking at condos because they might have found out condos weren’t for them or the type of condo they wanted was out of their price range. Basically, we wanted to make sure they were making the right decision. We also suggested they start to prepare their home for market at the same time and aim to be ready to list it in April or May. The plan was to sell their home in the spring market and to be fully educated about the condo market by that time so when their home sold they would be ready to pounce on the right condo when it appeared. This would minimize the chance of them not having a place to live, but we made them aware it was possible they’d have to rent a place if they couldn’t find a condo in time.

Lesson 2: Have a big picture strategy in place to minimize your risk and maximize the odds of everything working out perfectly for you.

In this case, the strategy was to learn about the condo market at the same time as they were preparing their home for market so they would be ready to buy as soon as they sold.

Lars and Lisa looked at condos and didn’t see anything they liked. They initially wanted to live in the central core, but started to explore other areas to broaden their options. They had also hoped to keep their price below $1m, but started to look at slightly more expensive condos to broaden their options even further. This isn’t unusual. It’s part of the education process.

Lesson 3: Don’t be afraid to explore your options before making a final decision to ensure you make the right decision, but do so in an organized and methodical manner.

If you start running around like a chicken without a head looking at all sorts of places in all sorts of areas you’ll just get confused.

It took longer for Lars and Lisa to get their home ready for market than anticipated. It was only ready to be listed in the first week of June. They hadn’t settled on the kind of condo they wanted yet, but they decided they’d try to sell anyways and if they couldn’t find a condo in time they’d rent for as long as they needed to.

They put their home on the market in June 2018 for $1.55m even though we thought it was worth about $1.45m. They decided to price it on the high side rather than on the low side because there was no urgency to sell and we wanted to ensure they got full value for their home. They could have listed it for $1.2m and hoped for multiple offers, but we didn’t think their home would have wide market appeal so there was a good chance the price wouldn’t have been driven up above $1.45m in a bidding war and they could have left money on the table.

Lesson 4: The wider a home’s general appeal, the greater the chance it will receive multiple offers. The larger the number of factors that detract from a home’s general appeal (no parking, bad curb appeal, close to or on a busy street, unrenovated), the less the chance it will receive multiple offers.

Generally speaking, the more “negative” factors a home has, the lower the price has to be to generate multiple offers. But the lower the list price, the less the chance the home’s price will be bid up high enough to reach its full value. (We’ll be looking at the perfect example of this in just a few minutes so stay tuned.)

Lesson 5: There’s no such thing as a one size fits all listing strategy because every home and situation is unique. To maximize your sale price, you need to pick the right strategy and the right list price.

Their home received a fair amount of interest in the first couple weeks, but no serious offers. We advised Lars and Lisa to take their home off the market for at least the summer because even if they sold they’d be unlikely to find a condo since there’s often less to choose from in the summer.

When fall arrived, Lars and Lisa said they’d like to wait until the next spring to list their home again. We agreed. We received a few phone calls from other Realtors in the fall and winter who said they had clients who wanted to buy their home for $1.35m because that was what it was worth and not a penny more, but we told Lars and Lisa they’d be better off waiting for spring and trying to get more money. In the meantime, they kept looking at condos and found a few they liked.

We suggested listing their home for $1.45m in April 2019 because we felt that was more or less its fair market value so they could stick close to that number in negotiations or, if they got lucky, they’d get multiple offers and a higher price. They chose to list for $1.4m because they wanted to make sure they sold quickly. They knew they might leave some money on the table with that list price, but were more concerned about having  ample time to look for a condo during the spring market. The week before their home was scheduled to hit the market another home in the neighbourhood was listed. It was also detached and it was more renovated, on a deeper lot and in a better location. The catch: it was listed for $1.0m (one million dollars). These people were hoping for a bidding war and they got one. I heard they received more than ten offers. We were hoping their home would sell for at least $1.55m because that’s what we thought it was worth. Unfortunately, their price was only bid up to $1.4m which, in my opinion, was way too low for that home. But that’s the risk you take when you play the low list price game. (See Lesson 4 above.)

Lesson 6: Be very careful when you intentionally choose a low list price to generate multiple offers. It doesn’t matter how many offers you receive or how much above list price your home sells for, you may still not be maximizing the value you’re receiving for your home.

We knew other buyers and their Realtors would point to this home and say Lars and Lisa’s home was worth significantly less than $1.4m because it wasn’t as nice, but we have confidence in our negotiating abilities and decided to go ahead with a $1.4m list price just the same. The first offer came the second day their home was listed. It was for $1.25m. Not surprisingly, the Realtor said that if the other home sold for $1.4m, Lars and Lisa’s home was only worth $1.25m. We disagreed and said that one sale does not define a market and that there were other comparable sales which supported our price of $1.4m. Lars and Lisa decided not to accept this offer and that buyer walked away. We received a second offer the next day. This time for $1.3m. Things weren’t looking good. Following our recommendation, Lars and Lisa decided not to accept this offer either. But then the first buyer decided to reappear, a third buyer joined the fray and the second buyer decided to take another shot at it so all of a sudden Lars and Lisa had three offers from which to choose. Unfortunately, they were all on the low side. But after some negotiating and convincing, aided largely by our knowledge of the local market, one of the buyers offered $1.45m which was what we told them their house was worth and $50,000 higher than the nicer house which sold the week before. Lars and Lisa accepted this offer and were happy with the outcome.

Lesson 7: Don’t be intimidated. Have the knowledge and experience necessary to negotiate the best price possible.

Having sold their home, Lars and Lisa were in a position to buy their condo. They did this within two weeks of selling their home. In the area they really wanted.

Mission accomplished.

Lesson 8: When you have a good plan and stick to it, you increase your chances of living happily ever after.

Even though I’m always learning new things in this business, the more knowledge and experience I accumulate the better I’m able to predict what’s likely to happen and how the people on the other side of the negotiations are going to react. While the market as a whole is currently fairly strong and stable, I’m finding this knowledge and experience to be invaluable when it comes to helping our clients sell or buy their homes because we never know what’s going to happen. Having a seasoned agent on your side is now more important than ever.

If you or someone you know is thinking of buying or selling and would like to receive the kind of help that involves honest answers, straightforward advice, no pressure and being treated like family, please free to connect with me. I’m always happy to help. Thanks for reading.