How much should I build into my price when I list my home?

This is a common question that sellers have. As you can see from the graph the list price to sales price ratio has bounced between 96% and 97% for 2008. So, what this means is, if you have a home listed for $300,000, the average sale price of that home will be in the $288,000 (96%) to $291,000 (97%) range. The reality is that you as a seller will determine whether you will take an offer or not. If a buyer offers you 90% of list price, then don't have to take it. If you have priced your home well, then your list to sale price ratio could be closer to 100%. I've seen homes that are well priced go for 100% of the list price or higher in this market. I've also seen the opposite occur. I've seen where a home has been on the market for awhile and/or needs quite a bit of work and a motivated seller lets the home go for 90% of list price. So, you always have to be careful when looking at averages because every home and situation is different. As a professional REALTOR®, I go over the whole process when I meet with a seller. Averages are helpful in giving you facts when you make your decision on price, but they are not the whole story.

How many days does it take to sell today?

The days on market average has been fairly consistent for 2008 in the Edmonton market. We started the year at 61 days and dropped down into the 51-55 day range in the remaining months. Many people call me in to sell their home and make the mistake of thinking they can put their home on and have it sold (ie have their money and move out) in 30 days. This is a possibility although very unrealistic.
Firstly, our days on market average does not include homes that sold but were also on the market previously and failed to sell. For example a home may have been on for 180 days with another REALTOR® and then it was relisted and this time it sold in 45 days with the same or different REALTOR®. The days on market reported is 45, NOT 225 (45 when sold + 180 when expired). So our days on market average is always understated. This is a minority of the listings but it does cause the reported days on market to be lower than in reality.
Secondly, the possession date on average is in the 45 day range. So, if you add the average days on market to sell (55 in July) plus the average possession date (45), you end up with 100 days or a little over 3 months from the point you put the home on the market until you receive your funds and move out.
That being said, I have sold homes in the first week and had a 21 day possession, so anything is possible. But, if you look at the law of averages you are better to give yourself 120 days from the point of listing to when you want to move out.

Should we buy or sell first?

This is a common question that people have when they have a home to sell. Should we find a home first, or sell ours first? I understand the worry that you won't find the right home, but in reality that is very rare. Especially today with our current listing inventory in Edmonton we always find a good home if we give ourselves enough time (60-90 day possession on your existing home). I always recommend to sell first. There are quite a few reasons but the biggest is money. Financially you can lose money by buying first. To explain this, when you are buying you are emotionally involved. When you are selling it is much more of a logical (have to do) process. I've seen many people buy first and overpay for their new home (emotional) then they "dump" their home and sell at a low price in order to get into the next home. Not to mention, it almost always puts you in a bad financial spot when you are covering two mortgages for any period of time. I've seen some people in this market that have bought first and have lost 10's of thousands of dollars (eesh!).
Some people try to buy subject to their home selling and this may not put you in a bad position immediately (not having to cover two mortgages), but your negotiating power is lessened when you have this condition on your offer. So, you still end up overpaying for the new home. This is also a real roller coaster emotionally. If you can't buy the new home outright and have to put a subject to sale condition in your offer, the seller of the new home will always put a time clause on the condition. What that means, is that if another offer comes in on the new home, the seller has the right to serve you with 24, 48 or 72 hours notice to either remove all your conditions (ie own both homes) or withdraw your offer. So, you end up back in the bad financial position by removing conditions, or you back away from the offer and lose your dream home. Not fun.
The last remaining problem is that pricing your existing home is not an exact science. Nobody, including appraisers, can tell you exactly what your home will sell for. We as professional Realtors can educate you on what your home should sell for, but until we actually have a buyer offer on your home, we are only working with hypothetical numbers. Not to mention the market can change while you are trying to sell. For example, 5 of your neighbours can put their homes up for sale, a local company can lay off 1000 workers, interest rates can go up etc. You get my point. You are in a much better position when you know exactly what you are netting out of your existing home.
That is why I always recommend you sell first.

July 2008 Edmonton Real Estate Update

Well this month we can definitely see a trend. We are starting to see our listing inventory finally coming down. This follows closely with previous years where we peak out in May with the number of homes on the market. There is then a gradual decline to a low of inventory at the end of December. January sees inventory building up until May and then the number of homes for sale starts to fall again.

On the demand side, the sales have been quite strong. We are just off April, May and June numbers of 1820-1850 sales, we sold 1752 homes. That is particularly good for July as this month is normally the lowest next to December for sales volume. This amount of sales is also much stronger than last July (2007) where we had only 1565 homes sold.