Why do most Ottawa buyers want "move-in-ready?"

Published 27 March 15 09:56 AM | Gord McCormick 

Most buyers we work with are looking for move in ready properties as much as possible.  Though there are buyers who are prepared to do some updating after buying a property, these are in the minority with the possible exception of very high demand neighbourhoods.  Here’s why: 

Buyers generally stretch when buying:

Most first time or “move up” buyers will bend or stretch their financial budgets or comfort level to get as much home as possible for the money.  This means that once the property is secured, any further investments must be financed out of cash flow, savings or lines-of-credit which is generally less favourable and more costly than using lower cost mortgage money to get a property that is “done”. 

Retail costs of updating or replacement can be scary:

If buyers have to rely on 3rd parties to make desired or necessary improvements, significant cash may be involved.  Doing kitchen or bathroom reno’s, finishing a basement, replacing roof shingles, furnaces and air conditioning, flooring or landscaping can run in to some serious money.  Even having a home professionally repainted can be quite expensive.

Country properties on private well and septic systems have a whole host of other systems and equipment that can require significant replacement or upgrading costs. 

Avoid the hassles and time:

Many buyers also know that the time and energy required to research, hire and trying to manage contractors can be a challenge.  Also, living in a construction zone for even a short time is not a lot of fun and even more difficult for those with young families or pets.  If many projects are required the overall timeline can become extended and seriously detract from one’s enjoyment of the home.  This is the “will-it-ever-be-finished?” syndrome that few want to experience. 

Property price comparison:

Buyers who look at a property priced at say $400,000 with an estimated $30,000 in repairs, updating or desired cosmetic changes will often then compare the initial property with those priced at $430,000 to $450,000 to see what they can get for the same overall investment.  If a higher priced property ticks most of their boxes then they will tend to favour that higher priced property. (assuming it is within their financial budget range) 

How this hurts sellers:

If most buyers prefer properties with the highest “move-in-readiness” score then properties with significant updating to be done, have a much smaller pool of buyers who will consider the property.  Often times these buyers may be bargain hunters, house flippers or other investors who will seek to find bargains at the lowest possible cost.  If these properties languish on the market for an extended period then they may be subject to really “low ball” offers. Fewer buyers=less demand=less competition=longer time to sell=lower market value.

What to do?

Sellers will definitely want to discuss with their Realtor well in advance of putting the property on the market, whether it makes sense to do renovations prior to marketing the property in terms of both saleability and what % of reno costs may be returned on resale. (this will rarely, if ever be 1:1)

Another good step can be to have a pre-listing home inspection done which will help point out areas to be updated/repaired/replaced/maintained and what the approx. costs may be. 

Buyers will benefit from their home inspector and Realtor who can also help them assess repair and updating requirements and the timelines necessary prior to firming up a sale. 

 

If you are facing any questions similar to these concerning your own buying or selling plans and are not already committed to another Realtor by all means give us a call at 613-435-4692 or oasisrealty@rogers.com

 

Gord McCormick, Broker of Record

Dawn Davey, Broker

Oasis Realty Brokerage

www.oasisrealtyottawa.com

@oasisrealtyOTT

 

Full service and lower commissions!

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