60/ JUNE 2012 THE RIDER Use Specific Properties Harder To Sell
spend money to make money.
I have been a full time Realtor for over 36 years. I have enjoyed a successful career based on hard work and good com- munication skills as well as appreciating you must
Our market and sales curve changes con- stantly. The real estate business is a very dif- ferent one then it was when I was eighteen years old and passed all the courses in order to receive my licensing. No smart phones, no com- puters, no answering ser- vices! If we weren’t near a phone in either the office or at home clients had to wait for us to return
to one in order for us to get back to them. Nowa- days they want the call back in 5 minutes or less or they are impatiently paging you a second call. Mind you when I first started a lot of the reason I did sell many homes was because I was he first to call back and I always kept in touch from then forward, sending out list- ings and calling on all and any properties which I felt may suit the buyer. Its habits like those which
established my career.
Single family homes are somewhat easier to sell. Value is based on size , condition, location and price. If they are priced right, clean, and show well they will sell. Always a family or couple looking for what the home has to offer. Income properties, rural prop- erties and especially farms and commercial properties are much more difficult to sell. This is because the value is based partly on the use and the income. The rules of supply and demand dictate the value of properties being sold. We all appreciate an income producing building such as a duplex, triplex etc. is a use specific property and only those who are looking for secondary income or a building purchase for investment reasons are interested in purchas- ing. Less demand, less value. Unless you are looking for some- thing close to a university which brings up the demand and therefore the value.
Rural properties are actually high in demand especially now with the green belt legislation pro- hibiting new growth in the rural areas but the buyers seem to be unrealistic in their expectations and therefore search for sometimes sev- eral years before they can rational- ize their expectations to reality. I often hear potential buyers exclaiming. ”This is not a $500,000 house!” they don’t understand that the home which sits on 5 acres with a 30 year old home, barn, long driveway in, trees and privacy is not the same house as you’ll pur- chase in the city on a 60’ x 130’ lot with no acreage, no barn, no septic, no well ( both of which cost approx. $20,000), long driveway which means services have to be brought back to the house, again at a big cost. Landscaping cost are much higher a s there is more land to scape. I’ve found they initially think all of the country attributes are just thrown in at no cost. There is value in the barn etc. so the house will not be as updated, large
or as polished as the one in the city because the same value country property has value attributed to these other improvements. In effect if you want the same house you’d pay $500,000 for in the city you must pay $700,000 or better for that same home in the country. It takes a buyer a long time to figure this out for some reason. Also low sup- ply, high demand causes an increase in value as well. The only factor which can give you a lesser price in a rural purchase is location. Therefore a move into a less desir- able location perhaps more removed from larger cities will help to keep the price down.
Farms are very use specific. Especially equine properties. I sell a lot of horse hobby farms and boarding facilities but it does take time. Few buyers with the financial resources to purchase. Big proper- ties which the owners sometimes have trouble maintaining because of their size and the work involved in keeping them up. A lot of dream- ers who would love to have a horse, dream about a move to the country but really have no idea of the work it entails or the financial difficulties in arranging a mortgage on a farm property. Then there are the improvements....I, having just built my own barn and arena, have a great sense and understanding of what they cost to construct. I’ve put in my own fencing so again under- stand the value. But the tendency for buyers is to lament the location of the improvement or it’s size, it’s layout, it’s quality. Very unfair, believe me, I know firsthand, but it is reality. The buyer seems to believe if he or she is not going to use the structure or its not exactly what they would have built or done then it has no value. A ridiculous concept but it is the mind set I see time and time again. There also are not enough properties being offered for sale to allow the buyer the opportunity to make comparisons nor enough sakes for me to be able to say will lots of proof this is what they sell for. And of course, no
two are alike so again difficult for the sellers to rationalize how the properties which have been sold compare to their own. They seem to believe always that their own is superior to the the ones sold previ- ously and that their location is bet- ter etc. The biggest factor is demand, low demand for these type of properties and even though that does match the supply number it still dictates a slower turn around time.
I would recommend if you are considering a use specific property sale that you allow for a year or more for marketing and achieving a successful sale. It will be less stressful for you as the seller - pric- ing is key with these properties, no room to try the market as the buyer comes out once and does not return again if he feels the value is over- rated.
Teri Davidson has been a licensed real estate salesperson and broker for over 36 years. She is the Bro- ker/Owner of Associate Realty Brantford Inc. Teri and her family also own and operate White House Farm in Ancaster, Ontario where they raise and ride AQHA Regis- tered Quarter horses and APHA Registered Paint horses, as well as breed Registered King Sized Ger- man Shepherds.
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