Buy first or sell first? Tough question in 2015 Ottawa real estate

Published 22 March 15 10:38 AM | Gord McCormick 

The dilemma:

Homeowners have always had to decide whether to find their “dream home” first and secure it or sell their existing home first in the hope they can find the “dream home” at the same time.  For a look at some of the challenges see a post on our Ottawa real estate blog:  http://www.oasisrealtyottawa.com/blogs/gord_mccormick/archive/2013/09/08/why-buying-your-second-home-may-be-more-difficult-than-the-first.aspx

 

Not a problem in the “good old days” (5 years ago!)

In our long running seller’s market which left us sometime in the last 3 years (mid 2012 by our reckoning), it was no problem.  Market demand was hungry for listings and most reasonably priced properties sold quickly, so those both buying and selling did not have to fret too much about getting their existing property sold after first finding the house they wanted.

2015: … not so much!

Now the tables are turned and we have a buyer’s market in full force in our market.  Our current market is characterized by excess listing inventory, very compelling and competitive offerings from our many fine builders and some price levels that have in many cases superseded the market’s ability to absorb them, particularly at the higher price points. (above $500K)  Average days-on-market for the year 2014 was 78 days for residential properties and 89 days for condos and year to date this year (through Feb) we are running at over 100 days to sell.

The risks:

Current homeowners who buy first and then try to sell an existing property cannot be 100% sure that the property will sell; what it will sell for or when it will sell.  This is especially true for those buying new construction that may be committing up to a year or more ahead of time and are not able to choose the time window for selling an existing property, since the builder dictates availability of the new home.

Since many buyers stretch their budgets to obtain their “dream home”, any shortfall in what they obtain on selling the existing property can be troublesome.

Not being able to sell a property quickly is also a concern and can lead to a lot of stress and sleepless nights for those who had expected their existing property to “sell in a week or two”.

Mitigating options:

Your Realtor can help with appropriate strategies and processes such as a “first refusal” offer to purchase or listing an existing property “subject to the availability of a specific property”.  These processes can be delicate and are not for the amateur seller who might end up owning two properties or no properties by trying to buy and sell at the same time.

A Realtor may also be able to assist with securing a rental property as an interim step, particularly if one is selling a property above $500K or the closing on the new property is a long way out, as can be the case in new construction purchases.

Those who have family or friends where they could move for a short interim period may also wish to consider this option as a stress reducer. (well, kind of…)

Make sure and have a realistic discussion with your Realtor about not just listing price but expected selling price (best case and worst case scenarios) and how long it should take to sell.  Be prepared for some bad news and adjust your pricing expectations accordingly, as the market dynamics are dictating-don’t simply list with the Realtor who tells you what you want to hear.

If you are not working with a Realtor then by all means give us a call and we would be happy to have that discussion with you and which of our tiered commission structures and marketing plans will work best for you in the 2015 market.

 

Gord McCormick, Broker of Record

Dawn Davey, Broker

Oasis Realty Brokerage

613-435-4692

Oasisrealty@rogers.com

www.oasisrealtyottawa.com

@oasisrealtyOTT

 

Full service and lower commissions!

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