Tuesday, August 16, 2011

Selling my DNA Condo :How much will I get?

We recently met up with a client who was looking to sell her DNA condo.  During our meeting it became very evident that her main concern was knowing what percentage of the asking price we expected to deliver to her.  Many Realtors use these statistics as a marketing tool for themselves by saying “Sold for 110% of the asking price!” As Realtors we know these statistics don’t carry much weight. However, from the perspective of a potential seller the listing agent looks like a superstar, right?

Pricing your DNA condo for sale is one of the most important parts of the selling process. Determining the listing price depends on a few factors, such as market conditions, comparable sales and of course the unit itself- taking into consideration layout, location and condition. There are few pricing strategies that can be considered once a seller is ready to go to market.

1. A common pricing strategy in a strong buyer’s market is to under price the property and hold off offers until a certain date. It is the seller’s home to generate a multiple offer situation which will in return push the selling price above the asking price. Although the selling price is above the asking price, it does not necessarily reflect that the seller got any more for the property than true market value. It is by using this strategy that you will see agents marketing themselves by stating they sold over the asking price. Keep in mind that a major concern with this strategy is that the buyer can’t actually afford the price of the property generated by the multiple offer situation. More times then none, their original budget was the listing price- not the selling price which can at times go as much as $50 000 over the original asking price.

2. Another strategy is to price the property at market value. This strategy is a safer strategy as it targets the right buyers. If a buyer has been financially pre approved for a mortgage, they know exactly how much they can afford.  An offer received that is conditional on financing approval will not be such an issue as the buyer’s have likely already been pre approved at the listing price.

3. A final strategy that is not as common as others is overpricing the property. This option works at it’s best when sellers have no urgency to vacate or don’t have any financial pressure to sell. A seller must carefully consider this option before listing their property as the buyer will most likely be someone who has been waiting specifically for that unit to come onto the market. In other words, the buyer pool will be much smaller for an overpriced unit, however an end user, who has been waiting for the unit will always pay a premium for their primary residence.

In short, don’t be fooled by marketing material that suggests that properties have been sold for well over 100% of asking. As you can see there are many different stratgies that can be carried out when deciding to list and sell your DNA condo. Take the time to carefully consider which option best suits you.

Click on DNA  to contact the Condo Chicks about listing your DNA condo for sale.

Friday, August 5, 2011

Condo TV Interview

The Condo Chicks were recently interviewed on their knowledge of the Toronto condo world. 

Click on DNA Condos to hire the Condo Chicks to sell or buy your next Toronto condo.

Tuesday, August 2, 2011

DNA 1&2 Condos or DNA3 Condos?

When it comes to purchasing a condo unit, many of our buyer clients ask us which is the better choice, buying a resale or pre-construction unit. The difference between the two being that one already physically exists and the other one does not. Deciding which route to take depends on a few factors such as timeline, motive and capital. In the case of DNA Condos on King Street West, buyers currently have the choice to go either way.  DNA Condos 1&2 are finished and can be moved in at anytime while DNA3 Condos will not be ready until 2013.

When purchasing a resale condo unit, such as DNA1 or DNA2 Condos, there are no surprises; what you see is what you get. You know exactly what you are getting into as you can physically visit the unit, see what finishes have been used, know how the management is running the building, etc. Generally speaking, items such as window coverings, light fixtures and built-ins are left behind by the sellers which are a bonus. Another positive aspect of buying resale is that a buyer is able to visit multiple units in different locations before making a decision to see which one best suits their needs. The down side of resale is that you are not the first owner of the unit and some prep work of the unit may be required before move in.

On the other hand, when purchasing a pre-construction condo unit, such as DNA3 Condos, you are essentially buying an idea and not a tangible item as the condo doesn’t physically exist yet. Instead of visiting the unit, you visit the sales center where you purchase off of a floor plan where you must visualize the space you are purchasing. The nice thing about buying pre-construction is that you are the first owner and everything is brand new. Like at DNA3 Condos, when color selection comes around, you can even pick the colors that you like best for your unit. Think custom made!  By the time the builder has sold enough units to start construction and construction has been completed, it isn’t until years later that you are actually able to move in. If you are looking to move into a condo unit immediately or within a short time period, then resale is the way to go but if you are able to wait a few years and have a flexible timeline then pre-construction may just be what you are looking for, such as DNA3 Condos.

The next thing to consider is motive. What is your reason for buying a condo unit? Is it to reside in or to flip? When buying a resale condo unit, you can potentially move in immediately whereas if you buy pre-construction you must be patient and flexible as the original occupancy date will most likely fluctuate. If it’s an investment that you are looking for, and the price is right, then pre-construction may just earn you that extra cash you are looking for. When buying pre-construction, you buy at today’s market price with the anticipation of the future market price being significantly higher.

Finally one of the most important elements of buying a condo unit is the cost and if you can afford the financial obligation. In either situation, a down payment must be made. In resale, on average a 5% down payment is given as a deposit with the offer. Depending on what has been arranged with the bank, a further deposit is paid to the bank upon unit closing. This deposit amount can vary from 5% down to 100% down, in which case a mortgage would not be required. When you purchase a pre-construction unit however this flexibility is not allowed. The builder has strict deadlines when deposits must be made. Usually a deposit is made with the initial signing of the documents, another one upon closing and then a few others in between which usually totals about 25% down.

A condo can be a great investment and a great place to live whether you purchase resale or pre-construction. Choosing which route to take depends mostly on your urgency to move but also on your financial situation and your reason for buying. In either case take the time to determine which route makes the most sense for you.

Click on DNA Condos for more information!