As usual, we were taking clients out for housing tour last Saturday. One of our clients interested in a house which values around 2million. He asked that since it is buyer’s market now, can we take a big advantage on the price – 20% off, is that possible? It is possible but not guarantee, because it really depends on the following situations:
Seller’s Background – we have to find out who is the seller, and why he/she is selling the property. If the seller is trying to get rid of the property as fast as he can – yes, the buyer can take an advantage from it. On the other hand, if the seller is a developer, he/she is building a house for sale, and he/she might know the market more than your realtor; and that will be hard for your realtor to do any further negotiation.
Days on Market – a study has been shown that the longer a house/townhome/condo is on the market, the less likely the seller is to get his asking price. Because buyers tend to believe that there might be a defect (something wrong with the home) in the property that causes other buyers to pass it up.
Builder’s Cost and Market Price– to build a 3500 sq.ft living area, its cost is $90-380/sq.ft; depends on the quality. Let’s say the seller/developer purchased the land 1-2 years ago, which values 800k-1m. Let’s take the median and do some calculation: $200(building cost per sq.ft) * 3500sq.ft living area = 700k + 900k land cost = 1.5million (total cost).
In addition, all the houses around this area sold price was 1.8 – 2million. Of course, 20% off would not work.
Multiple Offers – depends how many buyers are competing with you. Eg: if you are the only one who makes the offer, you would have a high chance to get the house and price reduction. On the other hand, if there are 10-15 buyers compete with you on the same property, most likely, we will lose our bargaining power; in some extreme cases, not even $1 off. Evidence: there was a house list on East Vancouver – listing price was 1.19M. The listing agent received 28 offers, sold price was 1.43M.
So, in the buyer’s market, can we take an advantage on negotiation? Yes, of course we can. We will do a lot of analysis (not only the market, but personal as well), and create several negotiation plans to fight for you. We will always put your interest first, even before ours.
Vancouver Real Estate Website:
https://buypropertiesbc.ca/Vancouver Listing:
https://buypropertiesbc.ca/idx/listings/vancouver-mls-listings-2/
