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As one of the predominant real estate sales teams in the Alberni Valley, it is natural that our business model is built on a foundation of helping people market and sell their homes. In our role as "listing Realtors" we are visiting people's homes on a daily basis in order to conduct market analyses, to ultimately suggest a listing price range in today’s market.

Let me repeat - we do this on a daily basis. In today's uncertain market, at a time when we are seeing very strong downward pressures on sale prices, it can be a tough job. The reason being is that we are generally giving people "bad news." Making matters worse many of the people we serve are past clients or friends. And while we do not have any control over the market price (we simply interpret the market), inevitably some people shoot the messenger. With combined experience nearing 30 years in this market, I can honestly say that we are approaching at 99% accuracy rate with our interpretations. Even so, the majority of our customers decide to list their homes above our suggested listing price. In a struggling market this can be a bad idea for a number of reasons. The most important reason being that with such a large inventory of listings in the Alberni Valley, it is inevitable that "older" listings can become buried in the market. It is in the first 30-90 days that a home will receive its maximum market exposure or "hype." It is critically important that a home be accurately priced in that time frame.  

So why am I telling you all this? There is a simple answer to that questions - I want to help you. Generally speaking, homeowners take great pride in their home. It not just a house made of lumber and nails, it is a place full of wonderful memories! This is human. The downside to this pride is that we tend to overestimate the value of our own homes. It is very difficult to objectively determine a monetary value on something to which we attach emotional value. The crux of the issues is this: buyers do not attach any emotional value to your home. Seems obvious when you put it that way, right?

There is a very definite silver lining in this market - anyone who is selling their home, to buy a new home, does not have to worry about the state of the market. Why you ask? Well, because you are moving laterally in the market. You are going to be buying a home in the same market conditions. You have nothing to lose (ignoring for a moment the transaction costs). When you buy your new home, you will not be willing to pay for the past homeowners memories and pride of ownership. Realizing this, you can list your home at an objective price during that critical 30-90 day period, knowing that you are going to get just as good of a deal on the home you buy.

Now, let me take this one step further. In a market characterized by declining average sale prices, I would argue that it is more important that you sell your home quickly, than it is to hold out for "top dollar." In cases where a person is moving laterally in the market, they tend to find a home to buy and make an offer "subject" to the sale of their own home. This means that they have committed to buy a home at a particular point in time in the market. If that person decided to list their home $10,000 above what the market indicates it is worth, it may take them six months to a year to sell (if it sells at all). In this time the market has moved down. You end up selling your home for less, and are committed to buy a home that is already worth less that you agreed to pay.

Let me leave this open to discussion on a positive note. Homes are selling, and prices are still relatively high (historically speaking). I hope that I have started you thinking about the intricacies of moving laterally in a market. If dealt with in an informed manner, you will be able to move laterally into that dream home without having lost any ground in the market!

Chris Fenton, PREC