Here’s why you need ComFree in ‘08

The residential real estate market changed here in 2007. Did you notice? And in 2008, it will change even more.The result of all this change is that ComFree will not just be a convenient, cost-effective option for homeowners. our private sale market will become a necessity for many of you homesellers. It will be either use ComFree or lose money on your home.

According to CMHC, housing starts in Metro Vancouver totalled 20,736. A Jan. 10 Vancouver Sun article pointed out that detached homes only accounted for 20% of the total, the lowest proportion since 1961. In this same article, Richard Sam, a CMHC analyst, attributed the decrease to high prices. Buyers were balking at paying what builders thought they should still be getting.

This isn’t surprising. The Vancouver real estate board reports that the average price of a detached home is now $800,000-plus for a detached home. This is a wonderful number if you bought your home five years ago when it was worth $400,000 (or 20 years ago when it was worth $200,000). But it begs the question: Who can afford $800,000 to buy your house?

At $800,000 you would need a household income of $144,000 and a $200,000 down payment (25% down) to buy your home, or you would need household income of $180,000 and a down payment of $80,000 (10% down). This is way out of the range of the average Metro Vancouver homeowner. Stats Can reports the median household income for Metro Vancouver is roughly $60,000 (At this income level, the average Vancouver household could purchase the average detached home, but only if they had a $550,000 down payment).

If it’s getting harder for developers to sell a brand new detached home, it’s going to get much harder for the average homeowner to sell his older home.

However, the most telling figures are reported by the Fraser Valley board. Last year, that board listed 32,953 homes but sold only 18,862. Listings increased 13.2% from the 29,115 in the previous year, but solds are a decrease from the 19,000 in 2006.

What this means is that the FVREB’s sold/list ratio has dropped from an already low 65% to an appalling 58%! That’s right, 42% of the listings on the Fraser board last year failed to sell and it’s the lowest success (or highest failure) rate they’ve had in six years.

This is also the highest number of active listings it has had at year’s end in at least five years. So if listings continue to increase and sales continue to decrease, it’s going to be even harder to sell a home in the FVREB area in 2008. More homes chasing fewer willing buyers.

Homes that are WAY beyond the means of the average household and listings that continue to outpace sales in the FVREB … it’s these trends that will make ComFree the only rational marketplace on which to sell your home in 2008.

How can ComFree help? When buyer resistance increases and unsold homes flood the market, ComFree provides you with something no commissioned real estate agent can offer: price competitiveness.

When it becomes hard to sell, the only advantage you can have over competing homes is price. If you’re going to sell, you’ll do the only thing you can: Sell for less.
And if you sell with ComFree, selling for less does not mean you will end up with less in your pocket. Eliminating the real estate agent’s commission, which adds no value to your sale, is your equity-saving, competitive edge.

If your neighbour is listed with an agent at $800,000, he will pay $25,000 in commission (and don’t forget the $1,250 in GST on top of that) and then be left with $775,000 when he sells. However, when you market with ComFree you will receive excellent exposure and support and still have $25,000 in leeway that your competing homeowner doesn’t have.

Which home do you think a buyer will put an offer on first? Your neighbour’s who’s listed at $800,000 or your’s, which can sell for up to $25,000 less?

With ComFree, it’s a win-win situation. You can sell quicker because your home can be priced lower than other comparable homes and you will not be penalized for your lower price. Buyers will be more inclined to buy your home because they may save on the purchase price.

2008 may be a tougher year to sell for many homeowners. But if you choose ComFree and price your home competitively, this tighter market can work to your advantage.

On a side note, to sell in the REBGV area it now costs the average detached homeowner $24,773 in commission, $17,001 for the average townhouse and $14,681 for the average condo, and that’s if it does sell. Remember, there is currently a 32% failure rate on that board because of the disconnect between what sellers think they should get and what buyers are now willing to pay.

To sell in the FVREB area it now costs the average detached homeowner $17,957 in commissions, $12,966 for the average townhouse, and $10,219 for the average condo, and that with a 42% failure rate.

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