An economic downturn could stress you out if you’re selling your home. A contracting and uncertain economy doesn’t usually yield top dollar for home sales.

At RankMyAgent, we aim to make the home selling process more manageable. So this article explains what a recession entails and tips to sell your home for the best price during a recessionary environment.

What is a Recession?

The traditional definition of a recession refers to two consecutive quarters (three-month periods — so two consecutive quarters equal six consecutive months) of declining Gross Domestic Product (GDP). But this definition comes with numerous asterisks.

Even if Canada faces two declining quarters, we may not be in a recession. We continue to face record-low unemployment rates, and in a recession, unemployment peaks.

A recession depends on numerous factors like employment, consumer spending, and GDP. An “official” recession usually occurs once a group of leading economists looks at these factors and determines we’re in a recession.

What Can We Expect During a Recession?

A recession’s outcomes and contributing factors are a “Catch-22” — i.e., the presence of the factors indicates a recession, but the same circumstances also result from an economic downturn.

We usually see the following during a decline:

• Layoffs: Businesses fear the unknown and want to reduce spending when the economy begins to tumble. You can expect layoffs in business departments that aren’t critical or where companies previously overhired.
• Less consumer spending: People are also fearful when we hit a recession. We’re scared of losing our jobs or taking a loss in the stock market. As a result, we might spend less and save more of our income for a rainy day.
• Depressed stock market: Investors may sell their stocks and choose safer investments. So, you can expect stock prices to decline. Some corporations also don’t fare well during a recession, and their stock price reflects that.
• Higher interest rates: This isn’t true for all recessions. But in our case, a recession may be caused due to the Bank of Canada increasing borrowing rates to tamp down inflation. This would make buying a home and making mortgage payments more expensive.

These factors can turn the residential home market in favour of the buyer. We’re more cautious about making significant financial decisions in a recession. We’re also unsure whether we can hold our job or afford increasing interest rates.

As a result, there are fewer buyers on the market. We might wait until economic conditions are more positive and confident before applying for a mortgage and making the largest purchase of our life.

But the number of sellers remains the same or even increases during this time. Some Canadians may need to sell their second home to cover costs or downsize to afford their mortgage in a poor economic environment.

Tips for Selling Your Home During a Recession in Canada

1. Rethink if You Need to Sell

Housing prices tend to peak before an economic decline and slide once a recession becomes a reality.

Selling in the middle of the downturn might not bring you the best price. Downturns tend to be buyer markets, where homebuyers have more leverage. You won’t likely have the same bidding wars or unconditional offers we saw a year ago.

Sometimes, you might not need to sell an investment property or move into a larger home right now. It’s best to consider whether entering the real estate market is required.

2. Sell Sooner Rather than Later

Past recessions show a history of dipping home prices. If you plan to sell in the near future, it’s better to do it as soon as possible. You’re only going to face tougher selling conditions.

Otherwise, you should wait until the economy is more positive before you sell. Home prices tend to fare better when there’s financial prosperity among Canadians.

3. Don’t Overprice Your Home

You might be used to seeing bidding wars and homes selling for hundreds of thousands of dollars over asking. But the market right now might not have the same prospects. You should temper your expectations to something reasonable.

Working with a real estate agent can help you set a reasonable selling price. Additionally, a realtor can guide you towards getting the best dollar for your property. They might suggest minor renovations or staging to bedazzle the prospects.

4. Give Your Home Some Minor Renovation

Minor renovations, deep cleanings, and restoring curb appeal can help move your home on the market. These changes make your home shine in photos and showings.

You don’t need to overhaul your entire kitchen. It may not be worth it in the current environment since labour is in short supply — contractors aren’t as open to negotiations or discounts. At the same time, home prices are going down.

Contributing your own labour by refreshing walls with a coat of paint or deep cleaning your carpets may be what you need to increase your chances of selling. A clean and refreshed home can help potential homebuyers envision themselves living there.

5. Consider Renting your Property Out Instead

Cities like Toronto and Vancouver are seeing record-high rent prices because surging interest rates have left prospective buyers unable to purchase a home — therefore, many Canadians continue to rent.

Some sellers who aren’t getting the offers they hoped for have turned to the rental market because the sky-high rent prices make being a landlord much more appealing.

If you aren’t in a rush to sell, renting out your property until better economic conditions might be an option to get the best return on investment from your property.

Recessions don’t have to be scary. Yes, there’s a fear of layoffs and depressed stock prices, but things rebound eventually. If you’re planning to sell your home during a recession, it’s vital to temper expectations. You can’t expect your home to sell for the same amount that homes sold for during a growing economy.

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Winter. Everyone’s LEAST favourite season. Well, unless you are an avid skier or snowboarder… or snowshoer, for that instance.

Whatever your winter passion may be, hang onto it, because for the rest of us, we just count down the days until that mojito finds its way back into our hands on a sunny patio.

There is one thing winter is really good for — and often overlooked — and that’s listing your home for sale.

“But there’s snow, and it’s all grey and yucky outside,” you might be thinking.

That’s right. There is. And, for the most part, other people who are looking to sell their homes are thinking that too. That means if you list in winter you are gaining a bit of an upper hand here.

You are getting a head start on those waiting for the turn of the season.

Basically, what I’m trying to say is by putting your home on the market during the colder months, you are lowering the number of competitors you are up against.

Here are a few tips and tricks you can keep in your pocket to prevent any more negative thoughts about this blessed selling season.

Keep it clean

Just as you would rake up leaves from your yard in the fall, or weed your garden in spring and summer, you must, must, must keep your pathways, driveways and sidewalks clear of snow.

Not only does this make it look like your home is well taken care of and loved, but it may save you from a lawsuit if there is a slip at one of your many showings.

No one likes to shovel, but you’ll have to stay on the ball over the winter months. Be sure to get out there after each snowfall. You may even have to get out there multiple times a day — unfortunately.

On the bright side, it’s great exercise — if that was something on your resolutions list. Or, if you can, hire a young neighbourhood entrepreneur who is looking to make a few bucks.

Use your listing to your advantage

When marketing your home online, photos are worth 1,000 words. However, when you are marketing your home in winter, those photos are suddenly worth a lot more.

Use your listing to showcase your home in other seasons as well so potential buyers can imagine themselves living there year-round.

Show off those photos you took last summer when your trees and flowers were in full bloom and the sun-soaked yard screamed for garden parties and late-night bonfires.

While choosing photographs of the home’s interior that were captured during winter, be sure to select those images that are drenched in natural light or are tastefully lit by lamps, candles and overhead lighting.

Use the calendar to your ‘advent’age

Do you see what I did there? ‘Tis the season to make spirits bright. That’s what we all look forward to during these frigid months, so use this! USE THIS!

Those holiday decorations will work double time to make your home stand out and emphasize just how cosy, warm and festive your home is — even during the darkest and coldest days of the year.

During home showings, have a nice fire going (if that’s an option, of course); have some goodies baking in the oven to trigger the olfactory senses, and adorn your tree with simple, festive and sophisticated ornaments that will allow guests to picture their own families enjoying the holidays here.

Turn the lights on

Have you ever been walking at night and caught a glimpse of a home with loads of light pouring out of the windows? How inviting does that look!

Lights not only make interiors look their best, but they emphasize those cozy undertones that we are after while trying to market a home during winter. So, flick on the lights. Up the wattage in your bulbs and invite some of that warmth into your home.

Don’t forget about your exterior lights as well. Illuminate walkways and pathways leading to your home for a warm welcome — and an extra safety measure for those slippery days.

Decorate with lights, too. That’s right. Create warm layers with lighting. Set up lamps to illuminate those dark, shadowy corners and take advantage of spotlights and LED strip lighting to direct attention to your home’s finest assets.

Don’t be afraid to use holiday lighting to your advantage here, as well. Tying into my last tip, those twinkle lights look fantastic both inside and out. So, bring ‘em in.

Show off the home’s winterproofing

Have you recently installed energy-efficient products that help lower your utility bills come winter?

Have you installed new windows, LED lights or a high-efficiency heating system?

Show these off to your potential winter buyers. These (mostly inexpensive) upgrades will be greatly appreciated by the next homeowner as they will reap the rewards for years to come.

Those looking to buy a home during the winter months are typically paying more attention and are more aware of things such as materials used in construction, lifespan and maintenance on the furnace and other winter-esque things that are vital for the upkeep and durability of a home after the first snowfall.

Listing your home in winter doesn’t sound all that bad now, does it? So, if you are looking to sell your home and you are interested in getting a leg up over the competition, do not fear! With these tools at the ready, you will be able to take full advantage of winter — and not just with a trip to the slopes!

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Colder weather means more than back to school. It also means that leaves fall from trees and clutter your front and backyard. While the plethora of colours is beautiful, unraked leaves make your lawn look unmaintained and detract potential buyers. These leaves also reduce the sunlight that your grass gets and suffocate them. Therefore, make sure your lawn is leaf-free

And just because summer is over, doesn’t mean that summer lawn care is over too. Although your grass may not grow as fast, it’s ideal to still cut it. Get rid of weeds to also maintain that perfectly green lawn.

Lastly, the colder weather can leave your summer flowers shrivelled and lifeless—waiting for the next summer sun. Trimming dead flowers tidies your flowerbeds and allows you to add fall-season flowers, such as chrysanthemums or potted mums, for a splash of colour among the evergreen bushes and trees. Pumpkins are also a great decoration as homes prepare for or retire from trick-or-treaters.

While the outside of your home is important, it’s the inside that many buyers care to see. And adding some seasonal colours, decorations, and scents can make the inside of your home that much more appealing. This doesn’t mean painting every interior wall orange but is as simple as warmly coloured pillows and blankets for the couch and autumn-themed centrepieces for the tables. Also, when you’re buying pumpkins for the outside of your home, a few mini pumpkins for the inside won’t hurt.

We buy with more than just our eyes, so adding some autumn scents can emphasize a cosy fall atmosphere. The scent of freshly baked cookies, apple pies, cinnamon, and, again, pumpkin, can resuscitate a person’s favourite autumn memories and put them in a buying mood. As an added bonus, the potential buyer can walk away from your showing with some delicious treats—or you can ignite these scents using an autumn-themed candle.

Colder weather demands a warmer home—you don’t want potential buyers walking in to realize that they’ll need to wear their jacket. Although there’s no snow just yet, the weather may require you to start running your furnace. Additionally, check your windows for damages that can lead to drafts. A damaged window leaks the warmth of your home to the outside and turns off potential buyers who want a place that can retain comfortable indoor temperatures during the winter. As well, installing weather stripping prevents leaks and secures comfortable indoor temperatures.

The autumn season also means shorter days and less sunlight. Buyers often come to see houses after work, and by October and November, the sun may have set by that time. This is why plenty of indoor lighting is crucial, as sunlight is no longer available to show buyers the beauty of the property. Fluorescent lights, as opposed to incandescent light bulbs, also make your home seem more modern. If you want to go above and beyond, Philip Hue light bulbs can completely change the dynamic of your rooms with different colours. And don’t forget the fireplace, which provides heat, light, and an autumn vibe.

Exterior lights are as important as the interior ones. Just because it’s dark outside, doesn’t mean that buyers no longer have an interest in your home’s exterior decor. Lighting the outside of your home gives a rough impression of what the property looks like in the daytime. Though, if they really have an interest, they’ll come back during the day.

A homeowner needs to maintain their home, and each season has its own maintenance checklist. Because winter is coming and heating soon becomes a necessity, replacing your furnace’s filter and ensuring it’s at its optimal performance is crucial. It also shows people that your home is ready for cold nights. A clean Heating, Ventilation, Air Conditioning (HVAC) system is part of your furnace’s optimal performance, so getting it cleaned should also be part of the to-do list. Both the heater check and HVAC cleaning requires a professional to come into your home, but before inviting them in, make sure that they have the proper certifications and credentials to perform the tasks that they offer. A clean HVAC system can also rid your home of fall allergens, helping those viewing the property breathe more easily.

Going back to falling leaves, it’s important to clear dead leaves from not only your lawn but also your gutters and water pipes. There are dozens of options for this, whether it’s fancy tools, professional help, or getting your hands dirty. Neglected gutters can lead to wood rot or pest infestations. Also make sure that water is not coming behind your gutter, as this leads to the formation of puddles on your walkways and driveways which ultimately damages them.

Finally, if you’re someone who uses their fireplace (or wants to impress people coming in for an open house by lighting the fireplace), make sure that it and the chimney are clean. Frequent fireplace use can lead to the build-up and accumulation of unburned tar vapours. And this leads to chimney and house fires.

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