Just an update on buying for value.
All property can be sold at any time.
The issue though is the fight between buyers wanting to pay as little as possible and pay what they think the property is worth and vendors trying to get as much as they can and wanting to get what they believe the property is worth.
Vendors determine price and buyers determine turnover.
So if a property doesn’t sell, it’s because the market and the buyers refuse to pay the price.
So what happens when a property doesn’t sell? Priced correctly and properly marketed it will sell. Ask too much and the buyers will go elsewhere or simply not buy.
Properties that sit for 100 days plus, shows the vendors are not realistic and are wasting their time and the agents time
Recently Ian Watts, lamented this issue in his video blog. Its worth watching because the point he makes is spot on, whether you like him or not!http://youtu.be/ruBkG47kLCQ
In the last few weeks a friend purchased a place up in SP.
My mate went in and made offers on two properties simultaneously. Two vendors asking the same price for very similar condo's.
Both properties had been on the market for over 700 days.
One vendor said "I don’t need to sell". The other dropped his price and sold. My mate got a further 12% off asking.
So what’s the value of the property for the person who didn’t sell? Obviously 12% less then he thinks. The market has just told him what the current price is. Its 12% less. Drop your price at that or below and you will sell your property!
And that is what happens in a falling market. Others cut their asking prices, sell and move on. Others love when prices rise but won’t admit when they fall.
A number of commentators on this forum who don’t understand the difference between value and price, have suggested that as Vancouver prices fall, then places like SP will also fall.
As ive indicated a number of times, the prices fell ages ago, it’s only the vendors who haven’t realised.
Here is an interesting example.4135 Douglas Court, Sun Peaks, BC
Listed November 2011. Days on the market 288. Original list $2,199,000, reduced $130,000 in February this year, and last week reduced a further $269,000. Now down 18% off asking to $1,799,999.
I my opinion it should find buyers around 15% - 20% lower then even this price ($1.5-$1.6m). That equates to around 35% off asking and is getting back to around the 2005 - 2006 levels. Having recently bought im not in the market and consequently one less buyer. If I hadn’t bought I would have been a starter at those sorts of prices which is a long way from where they started.
Even at that price the owners should still walk away with good $ in the pocket.
The purpose of this post is to illustrate that when markets fall and leave vendors expectations behind, its the motivated sellers who get the best $. Leave it too late, and the market has already gone, and even savage price reductions is only playing catch up.
Message is as Ian Watts would say. Drop your price and if need be drop again. You will sell. Demand your price because you don’t need to sell and you will be left behind.
Geezer: "What if somebody listened to Taipan and doesnt buy".
Well, they will thank their lucky stars, that they arent one of the thousands of miserable souls who cant sell their properties in 2013!