Greater Vancouver Condo Sales, Comparables Can Hurt!
October 28th, 2008Selling a condo in Greater Vancouver today can be a challenge, With the market in what almost seems like a holding pattern, there are very few sales.
Normally pricing condos is quite easy, there are usually a number of comparables to look at and prices are quite obvious based on other recent sales of similar units. This is the same tool used by buyers and sellers when negotiating a price.
With sales at such a low, people that need to sell are in some cases selling for prices which are far below the market value in order to attract one of the few buyers out there. What this does is create a low priced comparable which will be used by the next buyer when negotiating a price.
If you are selling you must be aware of these comparables and realize that they will be used against you. Although it is still not the norm to be selling at such low prices, it is happening in a number of instances and because there are very few sales overall, one of these low priced sales may be the only recent comparable that can be found.
You will want to find out everything you can about the circumstances behind the sale or sales, was it a distress sale etc. so you can be armed with that info when the comparable is being used in negotiations. In some cases this may help, but the reality is, if you have to sell you may find yourself having no choice but to accept one of these low offers as well. Of course if you do not have to sell you can hold out and there may be someone out there willing to understand the nature of the comparable sales and pay a higher price for your unit because it is the perfect place for them. Realistically this is becoming harder and harder with the limited pool of buyers currently willing to make a deal.
None the less, this information will provide even more useful when more buyers enter the market again, because at that time there may be more of these low price comparables out there and it will be even harder to combat them. The reality is, if there are too many of them then they will in fact be reflecting true market value.
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