Sellers

Should I Buy First Or Should I Sell First? (Part II)

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In a previous blog post (read it here) I explored some of the unique factors involved when selling one property and buying another at the same time.  I touched briefly on market conditions, budgetary concerns, and the best way to avoid being pressured into making a purchase you’re not completely happy with.  There's one more factor I'd like to take a look at - Timing.

Part of my job as a Realtor is to help clients time the closings of their purchases and sales as perfectly as possible.  If you're buying and selling at the same time, you'll ideally want to take possession of your new home a few days prior to giving up possession on your old one.  This way, you've got a few days' overlap with both properties.  This allows for a bit of breathing room with regards to booking movers, switching over telephone and internet connections, etc.

However, it's not always possible to line up the closings as closely as we'd like.  In anticipation of this possibility I ask my clients, "Would you rather have two homes for a few weeks or no home for a few weeks?"

Having two homes for a few weeks can be an issue as most buyers rely on the proceeds from the sale of one home to go towards the purchase of another.  Thankfully, bridge financing can help to "bridge" this gap.  Of course, bridge financing can only be obtained if there's a firm sale on the purchaser's property...

Having no home for a few weeks is obviously going to be much more of an issue for the majority of buyers.  Sure, there's the possibility of a short term rental during the interim.  But who wants to move everything into the rental and then turn around and move again shortly after?  I have seen people do it though - especially if their dream home comes along and they don't want to risk it passing them by.

If my clients and I anticipate that timing the closings may be an issue, I include a clause in the agreement that allows them the power to either move up or extend the closing date if they need to.  This doesn't always fly though - it depends largely on the other party's own particular situation and what kind of leverage position my clients are in. 

Ultimately, "Should I buy first or should I sell first?" is a question without an easy answer.  Each situation is different from the next and the same strategy isn't going to work for every buyer/seller.  Be sure to consult your realtor for advice on how best to proceed.

If you’re thinking of making a move and would like to know how we can help, please contact me for more info.

Should I Buy First Or Should I Sell First?

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As my career in real estate continues to grow (I’ll be entering my 13th year in the business next month), I find myself getting more and more repeat business from past clients.  Generally, this comes in the form of them wanting to sell the home I helped them buy a few years ago and move up to something bigger.  While this particular buying/selling scenario is not uncommon, it does have its own unique set of factors to keep in mind.  The easiest way to explore these is with the question, “Should I buy first or should I sell first?”

Buying First

When the time comes for someone to sell and move up, they usually have a pretty good idea of what they want in their new home.  More closets.  A powder room.  Some outdoor space.  Room for a home office.  The list goes on...  I can tell you from experience that my clients have an even more specific list of "must haves" the second or third time around.

Buying first is a great option as it allows you time to shop for the home you truly want as opposed to settling for whatever happens to be on the market at the time.  In the Toronto market inventory is often tight and it can sometimes take awhile for buyers to find and secure the right home.  The last thing you want is to be pressured into a purchase simply because the deadline on your own sale is approaching fast.  Buying first can give you more breathing room and peace of mind in this respect. 

Selling First

Selling first is a good option for some as it allows for a better idea of what their buying budget is.  What if your home sells for $50,000 more than you're expecting?  An extra 50K can certainly help check off more of the boxes on your buying wish list.  On the flip side, what if your home sell for $50,000 less than you're expecting?  No one wants to be in the position of having over spent on their purchase and coming up short on their sale.

Of course, when making any major real estate decision, current market conditions need to be considered.  In a balanced market, less weight would be given to this factor.  The reality though is that the Toronto real estate market is rarely balanced!  In a Seller's Market, buying first is generally going to be the safer option.  In a Buyer's Market, selling first will likely be the way to go. 

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

Who Actually Benefits From An Open House?

 
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There’s a misconception out there that open houses are not worth doing.

A lot of realtors think they're a waste of time. And a lot of sellers assume that the only people who come to open house are nosy neighbours and tire kickers.

Some people think that open houses do nothing more than benefit the listing agent, who uses them to try and capture new buyer leads.

In my opinion though, open houses are definiely worth doing and should be an important part of any home's marketing strategy.

In fact, an open house can potentially benefit all of the parties invloved in the buying/selling process.

How does the seller benefit?

The seller benefits from the added exposure the property gets. Open houses allow any number of potential buyers to view the property who were not able to book a private showing during the week. Yes, this includes nosy neighbors and tire kickers, but that's to be expected.

How does the buyer benefit?

The buyer benefits because it allows them added opportunities to get in to see the property. There are some buyers whose schedule does not allow them to book a showing with their realtor during the week, and open houses allow them a more relaxed time frame on the weekend to see the property.

Open houses are also great for buyers who have already seen the property with the realtor and want to come back for a second showing on the weekend. Perhaps bringing in family members, contractors, etc.

How does the buyer's realtor benefit?

The buyer's realtor benefits because it allows them to get their clients into the property if they are not available to show it themselves. Often times, buyers who are working with a realtor will still go out on their own and tour open houses on the weekends. They will then report back to their realtor if any of the houses are of interest and go from there.

How does the listing agent benefit?

The listing agent's most important job is to market the property and expose it to the highest number of potential buyers possible. Public open houses are an excellent way of doing this!

Yes, the listing agent might connect with some buyers at the open house who do not yet have a realtor (this is how I found the majority of my buyer clients when I first started in the industry). I'll be the first to admit that this side benefit no doubt strengthens a realtor's motivation to dedicate 3 - 4 hours of of their time on a Saturday or Sunday.

Still, the primary goal when a listing agent holds open houses is to expose the property and get it sold!

If you’re thinking of making a move and would like to know how we can help, please contact us for more info.

Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test?

 
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Ever since the new mortgage rules were announced almost 2 weeks ago, I've been monitoring the Toronto MLS to see how many new listings hit the market and try to take advantage of the upcoming changes.

I found a few listings that explicitly highlight the impending rule changes in the "extras" section of the property description. Take a look at the screenshots below:

Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test? Photo

Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test? Photo

Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test? Photo

Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test? Photo

Whether or not prospective buyers will actually feel the pressure to make a move on either of these particular properties remains to be seen, but no doubt there are sellers out there who see a potential opportunity here.

I've already heard from a few seller clients of my own who are seriously considering bumping up their plans to list.

Instead of waiting until spring 2018 as previously planned, November 2017 has become a very attractive alternative.

While not every buyer needs to stress about the new stress-test (as I outlined in my blog post from last week), some will certainly be affected by the new rules. Specifically those who need to push their mortgage amount to the maximum.

Consider first time buyers, for example. They have no home equity to throw into the pot, and rely only on whatever down payment they have saved. These buyers would typically need to push their mortgage amount to the maximum in order to break into the market.

And these are the buyers that some sellers are hoping to capitalize on in the coming weeks.

A buyer with a current maximum budget of $450,000 might see their maximum budget reduced to as little as $360,000 after January 1st, 2018.  This person will be highly motivated to make a purchase in the coming weeks, as they’ll be priced out of the market come the new year.

And it goes without saying that a buyer as highly motivated as this will be more inclined to pay a higher price in order to secure a property in time.

We’ll see how things play out over these next 2 months. I'm sure we'll see properties sell for higher-than-expected prices, and I'm sure that a number of sellers will benefit from buyers who are acting under pressure.

Dum-dum-dum Da-da Dum-dum.

Dum-dum-dum Da-da Dum-dum.

If you're a buyer and you have any questions just give us a shout and we’ll put you in touch with a mortgage specialist who can help.

If you're a seller and you're considering listing your home in the coming weeks, give us a shout and we’ll help you make the right move.

Multiple-Offers Are Still Very Much A Part Of The Toronto Real Estate Landscape

Multiple-Offers Are Still Very Much A Part Of The Toronto Real Estate Landscape Photo

Multiple-Offers Are Still Very Much A Part Of The Toronto Real Estate Landscape Photo

We're in the 2nd week of the fall real estate market now, and anyone who's been following along knows that in the past 4.5 months (ever since the Liberals announced their "16-Point Fair Housing Plan16-Point Fair Housing Plan" in April) we've seen a decline in the number of sales and, perhaps more notably, a decline in average sale prices.

Q:  Do these declines mean that there's now room for price negotiation on every single property that comes on the market? A:  Nope.

In fact... plenty of houses are selling for 100% of the list price. And an even larger number of houses are selling for more than the list price!

Despite all the talk of a "buyer's market", there are still plenty of buyers out there willing to pay full price for the right property, or even compete with other buyers and pay more than the list price if need be.

Let's take a look at all sales in the first 10 days of September for some insight (we'll go as far west as the Humber River, as far east as Victoria Park, and as far north as the 401):

Houses

  • 83 sales total

  • 58 sales at less than the list price

  • 10 sales at 100% of the list price

  • 15 sales at more than the list price (the highest being 119% of the list price)

Condos

  • 162 sales total

  • 77 sales at less than the list price

  • 37 sales at 100% of list price

  • 48 sales at more than the list price (the highest being 117% of the list price)

Percentage-wise, this breaks down as follows:

Houses

  • 70% of houses sold for less than the list price

  • 12% of houses sold for 100% of the list price

  • 18% of houses sold for more than the list price

Condos

  • 47.5% of condos sold for less than the list price

  • 23% of condos sold for 100% of the list price

  • 29.5% of condos sold for more than the list price

While these numbers don't reach the heights that we saw in January - April 2017 (in March, for example, there were a total of 2,145 combined house & condo sales - 73% of which sold for more than the list price), they do show us that buyers aren't being scared out of moving forward with their home searches. If a property warrants it, buyers will make agressive offers and fight for what they want.

Let's see what the rest of the month brings...

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Buy In The Summer And Then Sell In The Fall?

Buy In The Summer And Then Sell In The Fall? Photo

Buy In The Summer And Then Sell In The Fall? Photo

"Should I stay or should I go?"

The classic 1982 Clash song (which I fondly remember being a highlight on the dancefloor at the Dance Cave, circa '99-'01) is a fitting soundtrack for anyone considering a move in the current Toronto real estate market.

While buying is nowhere near as stressful as it was in the first four months of the year, selling is a different story. We're in a transitioning market now and selling your home isn't as simple a process these days.

This change in the market has many buyers and sellers confused about how to proceed.

I've got a number of clients right now who are hesitantly contemplating a "move-up" purchase into something larger than their current space.

While they're tickled by the fact that they aren't shopping for a home in the same feeding-frenzy market we saw in January - April, the prospect of having to sell their home in this more relaxed market has them second-guessing whether or not now is the right time to make a move.

While their hesitation is certainly warranted, I don't think anyone should be totally writting-off the possibilty of a move in this current market.

Keep in mind, shopping for a home in the fall might not be the relaxed affair it is right now. Although no one can predict exactly what's going to happen in the fall, we need to consider the possibilty that market activity will pick-up again and we'll all be looking back at May/June/July/August as a four-month blip.

A few possibilties to consider when looking at how the market might be spurred towards greater activity in September:

  1. With today's interest rate increase by the Bank of Canada (I'm writing this blog post on July 12th, the same day that the Bank of Canada has announced their first rate increase in 7 years), there are going to be buyers out there motivated to make a purchase before their current pre-approval rate-hold expires in 90-120 days.

  2. After "taking the summer off" from their home search, buyers who've been sitting on the sidelines since the Liberals announced their 16-Point Fair Housing Plan in April will simply decide to get off the fence and take the plunge.

If the market does start to warm-up again in September we could all be looking back saying, "those who bought in the summer and then sold in the fall did very well for themselves...".

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Is It A Bad Idea To List Immediately After Labour Day?

Is It A Bad Idea To List Immediately After Labour Day? Photo

Is It A Bad Idea To List Immediately After Labour Day? Photo

Summer doesn’t officially end until the Autumnal Equinox in the 3rd week of September, but we all know it really ends the day after Labour Day.

Every year, the Tuesday after Labour Day sees the kids go back to school, the white clothes go back into the closet, and the real estate market come back to life after the August slow-down.

A whole slew of new listings hit the market during that first week after Labour Day, and plenty of eager sellers (and realtors) are excited to get the ball rolling.

In my opinion though, it’s a good idea to consider waiting until the following week to list your home for sale.

The goal is to expose the property to as many buyers as possible, but a good chunk of the buyer pool is distracted at this time of year.

There’s so much happening in people’s lives during that first week after Labour Day, that there’s a good chance many of the new listings are going to slip-by unnoticed.

  • People are busy getting back into the swing of things at work.

  • Anyone working in a seasonal industry is likely focused on transitioning over to their fall market.

  • People are coping with the fact that summer’s over and the cold & rainy weather is just around the corner (ugh).

  • And then of course there are the families that have small children…

I know that my wife & I are going to be preoccupied these next few days with starting our oldest daughter in JK. If we were searching for a home right now we’d almost certainly be taking a week off from our search to concentrate on the start of school.

I myself have a new listing coming out soon, and we’re waiting until that 2nd week after Labour Day to go to market. My clients are fully onboard with the idea that we’ll reach the maximum number of potential buyers if we wait that extra week.

That’s not to say that a seller won’t still do well if they list right after Labour Day. And not every seller is even going to have the option of waiting until mid-September to list.

If you really want to maximize your odds of success though, you do need to consider all of the angles and strategize accordingly.

So, while it might not necessarily be a bad idea to list immediatley after Labour day, it might be a good idea to hang back and wait a week.

Here’s to a kick-ass fall market!

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Did There Really Need To Be 15 Offers?

Did There Really Need To Be 15 Offers? Photo

Did There Really Need To Be 15 Offers? Photo

I was involved in a multiple-offer scenario last week, on a condo townhouse in the east end.

The property had a helluva view, and there was no doubt that it was going to attract plenty of interest and receive a bunch of offers.

“A bunch” ended up being an understatement.

There were 15 offers. FIFTEEN!

The property sold for 125% of the list price (it was listed at $409,000 and sold for $510,000).

With so many offers and such a high sale-to-list price ratio, you have to ask yourself, “Did they really need to under-list the property by that much?”

Couldn’t they have listed at, say, $449,000 (which would still be “underpricing” the property, albeit less drastically)?

While there was obviously one very happy “winner” on offer night, there were 14 other buyers that went home empty handed.

No doubt, some of those buyers went in offering less than $449,000. And despite submitting what they (and/or their realtor) thought was a reasonable offer, they never actually had a chance.

Couldn’t the sellers have been a bit less extreme in their pricing, and perhaps spared a handful of those hopeful buyers on offer night? Wouldn’t they still have ended up with a $510,000 sale price?

Truth be told, there’s no way to know for sure if they would’ve ended up at the same sale price (although I think they would have). Sure, it’s possible that the top offer wouldn’t have come in as high had there only been 7 or 8 offers (unlikely I think, but possible).

On a funny side note, the listing agent had made a point of saying that he felt that there was no need to put anyone through the hassle of going to get a certified cheque ahead of offer night, as it would only add undo stress and waste too many people’s time.

Okay…

But he felt it was reasonable to under-list the property by $75,000 - $100,000? He didn’t think that would result in wasting a bunch of people’s time? Ha!

Granted, the listing agent did a great job for his clients. He orchestrated a process that got them a record-high price for their property.

It’s a frustrating process though, when one happy seller and one happy buyer have to leave 14 other disappointed parties in their wake.

If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.

Who Lists Their Home For Sale In Mid-December?

Who Lists Their Home For Sale In Mid-December? Photo

Who Lists Their Home For Sale In Mid-December? Photo

Who lists their home for sale in mid-December?

People who have to sell, that’s who.

Otherwise they’d wait until the 2nd week in January, which is when the spring market starts and an influx of buyers begin (or resume) their hunt.

Sure, there are still some buyers out there looking in the middle of December. Not many though. And the ones that are looking are likely doing so half-assed, as they’re distracted with holiday obligations, etc.

Sellers in the Toronto real estate market don’t always have a choice though, when it comes to timing the sale of their home. Sometimes, listing in mid-December is their only option.

For example, let’s say you make a purchase at the end of November, with a 60 day closing. The good news here is that you go into the holiday season knowing that you’ve bought a house, and the stress of searching for a home is off your plate. But now you’ve got a home to sell, just as the market is about to slow down!

Some of you are thinking, “Well, don’t buy a home at the end of November then! Make your purchase in September or October instead.”

The reality is that buying a home in the Toronto real estate market can be tough; there’s a tonne of competition when it comes to good houses and if an opportunity presents itself you have to jump on it, whether or not it’s actually the best time of year to make a move.

This isn’t necessarily a bad thing though.

If you have a great house in a great neighbourhood, and you’re able to get your act together quickly enough to list within that first week of December, then you’re likely going to be okay.

You might actually benefit from the fact that there won’t be many other listings to compete with, and you’ll appeal to those buyers who are seriously looking to lock down a purchase before the holiday season starts.

When To Wait

If it’s going to take a couple of weeks of prep time to get your home ready, then you need to consider putting off listing until the new year.

Or if you’ve got the kind of property that might take a little longer to sell (it ain’t the purdiest house on the block, and/or it’s in a less-than-desirable neighbourhood), you might want to avoid sitting on the market during the holiday season. A house like this is going to look staler than last year’s fruit cake by the time mid-January rolls around (zing!).

Not everyone has the stress tolerance to wait though.

Going back to the example above, if the home you purchased is closing on February 1st, then waiting until the new year to list only allows you a couple of weeks to get yourself a firm sale (this is assuming that bridge financing is going to be an option). A tight deadline like this is too stressful for some sellers, and they decide to swallow the risks of listing in mid-December.

Either way, there are pros and cons to each option that a seller has to accept.

My advice is to work with a realtor who has guided clients through this process before. You need someone in your corner who has a handle on all the angles, especially at a time of year when there's so much else to stress about!

Happy Holidays!

If you're thinking of selling your home, and you want an agent who knows when the best time to list is, feel free to contact me for more info.

When Should A Seller Consider Accepting A Bully Offer?

 
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When should a seller consider accepting a bully offer?

I am of the opinion that a seller is almost always going to do better if they avoid looking at bully offers, and wait until their scheduled offer night instead.

Every now and then though, a seller finds themselves in a situation where a bully offer is just too damn good to pass up!

Sometimes the price is so phenomenally above what they were expecting to get, that it's just not worth the risk of waiting and ending up with a lower price on offer night.

Sometimes the sellers are seriously stressed out by the entire process of having their home on the market, and the prospect of having it all over-and-done with is a no brainer.

And then there are times where it's actually looking like the home is not going to get the offers that the sellers want/expect on offer night. Case in point...

Earlier this year I had a listing in the west end of the city.

We spent a couple of weeks prepping the property to go on the market, and we decided that the best strategy would be to review offers on a specific date (the following Tuesday after the property initially hit the market).

I actually felt that we were pricing the home at the very top range of what it might be worth, and that we shouldn't necessarily expect to get multiple offers on offer-night. My clients appreciated where I was coming from, but we still felt that a hold-back on offers was the right strategy since comparable homes rarely come up for sale in the area.

Five days into the listing, I received a call from a buyer's agent, saying that her clients wanted to submit a bully offer. My clients were happy to look at it.

Once the offer was registered with my office, I did my duty and reached out to every single agent who had shown the property. And you know what? None of them had clients who were interested in submitting an offer. Not one.

None of them wanted to compete with a bully offer, and in fact, none of them were planning to submit anything on the scheduled offer night either!

It was quickly becoming apparent that this bully offer was probably the only offer we were going to see.

I told my sellers that they were likely going to do much better if we worked with the bully offer that night, as the buyers would be acting under the perceived threat of having to compete with other buyers on offer-night.

We ended up selling the property that night, with only the one offer, for above the list price.

Needless to say, my clients were very happy. The buyers were happy too, as they the secured the home they wanted (who knows if another buyer might've come out of the woodwork on the scheduled offer night and out-bid them?).

Bully offers are a tricky beast, and it's sometimes a tough call on whether or not to to work with them. Sometimes though, it just makes sense to take the money and run!

If you're thinking of selling your home, and you want an agent who knows when you should or shouldn't consider accepting a bully offer, feel free to contact us for more info.

Wooly Bully Offer!

 
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I'll take "Before & After" for $800, Alex.

Answer:  Popular 1965 song about the way houses are now sold in the Toronto real estate market.

Question:  What is "Wooly Bully Offer!"

Bully offers have always been a part of the Toronto real estate market. Over the last year though, they've become much more commonplace than ever before.

They've became so prevalent in fact, that almost every listing with a scheduled offer-date now includes the following note, "The seller reserves the right to consider preemptive offers".

(Yes, bully offers are now often being referred to as "preemptive offers". Us realtors are capable of putting a positive spin on any negative, and we're apparently trying to class-up the term a bit.)

It used to be, a listing would hit the market on a Tuesday or Wednesday with a scheduled offer-date for the following week, and the sellers would wait until then to review any offers.

This would give everyone plenty of time to see the home and do their due diligence before submitting an offer.

Buyers would have time to crunch their numbers and work with their mortgage person to get the financing in order, they'd have time to take a look at the pre-listing home inspection (or do their own inspection), and they'd be able sleep on it all for a few days before deciding whether or not to participate on offer-night.

Times have changed.

We're at a point now where sellers cannot bank on the fact that a home will still be available for sale come offer-night.

The new reality is that buyers have to be prepared to go and see a listing within just a few hours of it hitting the market, and potentially submit an offer that night!

And of course it goes without saying that their offer has to be a damn good one. No conditions, a significant deposit, and a price well-above asking.

This is just the way it is now; the whole concept of "offer-night" in the Toronto real estate market has been disrupted.

Remember when times were simpler? Like the time that Matty told Hatty about a thing she saw...

 
 

If you're thinking of making a move and want an agent who's able move quickly and help you submit a competitive bully offer, feel free to contact us for more info.

Your Realtor Is Full Of S**t!

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With Labour Day behind us now, the fall real estate market has officially begun!

Just like last year, and the years before that, we're going to see a ton of new listings hit the market this week. And inevitably, some of those listings are going to be overpriced.

There are a handful of reasons why a seller chooses to overprice their home. In this post I want to focus on just one of those reasons: The listing agent lied to the sellers about the true market value of the property.

The Sunshine Approach

The manager at the brokerage where I started my real estate career referred to this as "The Sunshine Approach"; the idea being that the listing agent is "blowing sunshine" up the seller's arse by deliberately overvaluing the home in order to get the listing.

I see it happen all the time. A seller interviews two or three realtors, and ultimately chooses the one who suggests the highest list price. The seller gets stars in their eyes, and is fooled into thinking that the ridiculous list price is actually achievable.

The listing agent's plan is simple: continually work on the seller for price reductions until the home finally sells (almost always for less than market value).

Isn't The Seller Partially To Blame?

Yes, the seller is often partially to blame here. Especially when the other two realtors they interviewed suggested lower list prices (which were no doubt backed-up by tangible market data and past sale prices in the neighbourhood).

Instead, the seller chose to list with the one who came up with the highest number, in spite of what the market data showed.

The seller in this situation sometimes knows, in their gut, that it's too good to be true.  But flattery and the promise of an unprecedented sale price get the better of them.

Have I ever taken an overpriced listing?

Yes, of course I have taken an overpriced listing.

The difference being, the sellers knew from the beginning where I stood on the value of the home.

I made it clear to them that the list price they were choosing was too high, that there were risks involved with overpricing, and that a price reduction would eventually be needed.

It's certainly not the best way to sell a home, but sometimes a seller is determined to "try their price first", even if doing so is going to potentially have a negative impact on the final outcome.

In the end, a seller needs to be realistic and question any advice that sounds too optimistic.

If you're interviewing more than one realtor, be cautious if one of them values your home significantly higher than the others.

A little sunshine is good for your health, but too much will leave you burned.

If you're thinking of making a move and would like an honest valuation of your home, feel free to contact us for more info.