If you’ve been considering selling your home or condominium, the good news is that Ottawa’s resale market is in your favour.
Though we can expect a surge in listings as the popular spring season approaches, our city continues to be a “Sellers’ Market”, with a shortage of available properties and a lot of buyers looking. This term means that the Seller’s of properties are in position that due to low inventory they are able to obtain higher than normal prices for their property with many selling way above the average price for the same property just a few months ago. When new listings arrive, particularly in popular neighbourhoods, they get a lot of attention. Properties in popular areas are selling quickly, sometimes with multiple offers. As a result, average sale prices have increased faster than usual in Ottawa.
In 2021, the average sale price for a condo-class property in Ottawa was $419,683 up 16% from 2020. The average sale price for a residential-class property was $719,605 up 24% from the previous year. These are just averages of course, and not every property in every neighbourhood has increased this much of course.
But with this kind of increase, we sometimes see sellers who are understandably excited about the hot market and get carried away, deciding to list their properties at unrealistically high asking prices. I often have to explain to seller clients, a seller’s market does not mean you can list your property at whatever price you’d like and then sit back and await a flood of offers. Properties need to be accurately priced to encourage buyers to take a look at the property and if a property is listed correctly, it will attract numerous buyers and potentially sell over the listing price.
When I first meet with clients, some sellers tell me they have a dream figure in mind. Some retirement-age sellers who are downsizing, for example, have a specific idea of the retirement nest egg they want, and they want to list their home at a price that will achieve that goal. Unfortunately, what buyers are prepared to pay for your property will be dictated by the market, and the basic rules of market value. In real estate, “market value” refers to the price range that similar properties to yours have sold for recently. When I work with sellers and we are discussing a listing price, I show sales details of similar properties in their area and the prices that the sellers accepted in recent transactions. The comparison is done with my many years of experience and with statistical knowledge of “who is the typical buyer” for the type of property I am analyzing. As I explain to sellers, if you want to attract buyers, it’s important to keep market value in mind and price the property conservatively. This can mean listing a little bit lower than the expected sale price which I call “the sweet spot” in order to spark a lot of interest from buyers. We will decide together on a listing strategy based on the specifics of your property, location and price range, but I will generally try to persuade a seller not to list far above the market value.
During our tight market conditions, as I have worked with buyers looking for properties, I have seen numerous instances where sellers and their agents decided to list at an unrealistically high price, and have then seen that strategy backfire. Even with a shortage of inventory, many properties have sat on the market unsold. Some sellers then reduced their asking prices in hope of attracting offers but in the end obtain less than if they had priced the property correctly and with the guidance of an experienced agent.
The old saying of “the first impression is the most important” holds true with real estate as well. Presentation, accurate pricing and extensive marketing will obtain the highest price possible in all markets and in a “Seller’s Market” accuracy is important when it comes to listing price. Many buyers, seeing a reduced asking price, will sometimes wonder if something is wrong with the property, and will be less likely to put in an offer.
Keep in mind also that while you’ve probably heard stories about bidding wars, not every property on the Ottawa market are receiving multiple offers, even with low inventory. Yes, properties in particular neighbourhoods and in popular price ranges will often receive more than one offer. But other properties may not. And setting a price unreasonably high can result in turning buyers off from putting in an initial offer. Keep in mind that the buyers’ and their respective agents (Realtor) has access to the same sales information, and will be sharing that information to help their clients decide how much to offer.
The reality is that their offer will be based on market value, not on meeting a dream figure you might have in mind.
This is why I will generally recommend to seller clients that we list a property conservatively, with market value in mind. With more than 30 years of experience assisting clients in buying and selling and negotiating offers, I have a good sense of what will attract buyers, and how to sell a property quickly while obtaining the highest price possible in today’s market.
If you’re considering selling or buying property in Ottawa, I’d love to chat with you about the current market and conditions in your area of the city. You can read more about me at www.nancybenson.com, where you can see my listings and read testimonials from clients.
Feel free to give me a call, at 613-747-4747.
