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Posts tagged ‘home inspections’

8
Feb

Market conditions stressing out local Realtors too

hair-pullAs a manager for a busy downtown Toronto real estate office, I never thought I would be spending my time talking agents off the edge of a cliff. The truth is, that the market is breaking new ground on agent management. In the past, my conversations with fellow agents revolved around helping them write clauses, dealing with complaints, running meetings, being a liaison with front desk workers, reviewing advertising and generally ensure their business was running smoothly. Today I’m still doing those tasks but as an unfortunate byproduct of this market, I find myself spending a lot of time comforting agents, offering condolences and talking through the ‘post offer’ game tapes. Don’t get me wrong, these are great conversations, but I worry about an office full of stressed out and exhausted agents.
Now, you might be thinking…boo hoo, poor agents, they make so much money it’s hard to have any sympathy. The reality is that the buying process is seriously intense these days. Frustration levels amongst agents are extremely high. They are missing out on offers on both condos and houses and our office meetings and masterminds are dominated by countless stories of failed offer attempts despite clients throwing everything they have at a property.
The problems of low supply, as reported in the media, are not limited to the downtown core either. This is a Golden Horseshoe problem, from Hamilton to Ajax and as far north as Barrie. Granted, the supply crisis is highest in the 416. For several years I have been tracking the weekly sales of houses and condos in the downtown market, defined by the area between the 401 and the lake and east to include the Beaches and west to include High Park. Over the years I have watched the general trend of tightened supply in both houses and condos as well as an increase in the percentage of properties selling over the list price. While housing has stayed relatively consistent, only edging up slowly, the condo market has often surprised me. When I first started tracking sales, there was only true competition on about 13-15% of units sold. That percentage was pretty stable for a few years. Then the number started to shift. By mid year 2016 I started to see more units selling at or above the list price. By June we started to see 30%, by October we were testing out 40% and by December we were seeing some numbers in the 50% range. Imagine, half of all condos selling above the list price. In January 2017 new records were set. Last week we hit 65% and when I am reviewing each and every listing on a line by line basis I notice that condos are not selling over the list price by a $5-10,000 like a few years ago, they are selling over the list price by $50-100K now. It is an extraordinary phenomenon.
Freehold homes face the same challenges for buyers. Recently a home in the west end, listed at $799K sold for $999k then, less than a month later a similar home sold for over $1.2M. Everything in an agent’s gut says these houses are worth the same money. So imagine what is happening to those clients who are being told to submit their offer based on a recent sale, only to get completely blown out of the water.
What impact, if any, is filtering down to the agent on the street? Productive agents are feeling the pressure as much as new agents entering the real estate field. I personally find myself spending as much time coaching the newbie agent the art of increasing your odds at the offer table as talking to the experienced agent who is frustrated with market conditions and looking for answers. And it’s not just the shear number of buyers looking for homes that is creating high stress levels. Increased scrutiny by the banks on their borrowers (sometimes insisting on conditional financing clauses), appraisals and quick home inspections are severely complicating the buying process. Are there any quick fixes? Nothing seems evident on the horizon and my impression is that as the spring market approaches it is going to be a whole lot harder before it gets easier.
Mark McLean is the Broker/Manager at the Bosley Real Estate Queen St W office, the Immediate Past President the Toronto Real Estate Board and a director at the Ontario Real estate Association. The opinions expressed here do not reflect the opinions of TREB, OREA or Bosley RE.

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3
Nov

What’s An Optimum Number of Offers?

multiple offersGiven the scarcity of listings in the Toronto market these days its understandable that we touch on the topic of multiple offers from time to time. It’s probably because no two scenarios are ever the same but last week, at our weekly Mastermind session, the question turned the multiple offer topic around. When listing a property is there an optimum number of offers that our pricing should attract? We went around the room to get everyone’s opinion on the matter.
History dictates that we only need one good offer to sell a home so theoretically we should price the home to attract that one buyer. Unfortunately (or fortunately) the cards are stacked in favour of the Seller so even pricing fairly can lead to two or three or even four offers because there is just no sure way to predict how desperate a buyer might be but the question remains, do we try to price to get one offer or do we under price to attract multiple offers and hopefully push up the price for the buyer? (and if so, by how much?). If the choice is to under price to create excitement then how low do you go and how many offers are you hoping to attract? We had several opinions on the topic because pricing really is a moving target. The answers ranged from 2 to 10 offers.
There is a slippery slope to all this if you are a Seller, and I have written in the past about a seller who only got one offer on her property on offer night and was totally annoyed with the agent despite getting full price. The fact remains that underpricing can be dangerous. Sometimes we price a home thinking we have determined perfect market value and then we are hit with multiple offers. Sometimes we list under market value and get only one offer if at all, and then there are those cowboys who list hundreds of thousands under value and hope to generate 50 or 60 offers. But not getting an offer on offer night puts an agent on the defensive right away. The client is looking to you for answers. Where are all the offers? What’s wrong with my house? In this hot market why isn’t my house selling for over list price? Simply put, there are just too many variables to know for sure and it could be as simple as it’s raining or the buyers couldn’t get baby sitters.
So when it comes to the list price, know your competition and nail the market value. Under price just a little to create some interest but not a flood of buyers. Take the guesswork out of the listing and have the home inspection done well in advance.
In the end, everyone should know that it’s the Seller who determines the final list price but it is up to the agent to conduct an in-depth market evaluation and then determine the right strategy to get the Seller the most money.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

9
Oct

The Real Estate Chain Reaction

science class
Today in Mastermind we talked about a series of events that, like a chain reaction, happen when you do everything you can to ensure the right conclusion. Here’s what I mean….do you remember back in high school chemistry we were asked to mix two chemicals together and then document the reaction? Often the students had different conclusions. Why? Because of the variables involved. Was it the measurement of the ingredients, the temperature of the flame or the length of time the chemicals were mixed?

In many ways, the outcome of your first interaction with a buyer or a seller, depends on the steps you take next. As with many agents I know, the first listing is often a friend or relative. This is a great way to get your career off and running, but, for ultimate success, you need to remove all chance and stick to the tasks that work. That means coming out strong. Prepare and stage the house to perfection, get a pre-home inspection, take care of any repairs, order virtual tours and professional pictures, tell the neighbours, hold an agent and public open house, etc, etc. the list is extensive and, quiet frankly, labour intensive and expensive, but at the end of the day you know that you didn’t leave anything out. I bring this up for one reason. You don’t leave any stone unturned because a perfect execution will lead to more interaction and more deals.
Today we talked about the real estate chain reaction and had some interesting examples of it. We heard from one agent who put an ad in the paper for a small house in a relatively unheard of neighbourhood. In a time when newspaper ads hold little value to a young demographic, it seems like a colossal waste of money, but a strange thing happened. The agent got a call from an interested buyer because their parents, who were helping with the purchase, had seen the ad. Bingo. Connection made.
Here is another one. An agent is out-door knocking. He just happens to meet someone interested in selling. Within a week the property goes on the market and sells successfully. The owners were so thrilled they used that agent to sell the mother’s house. That one sells quickly too. The agent then starts canvassing the neighbourhood to let everyone know that he sold it but to also ask if they know of any other people on the street are thinking of selling. Someone mentions the vacant house down the street. The agent writes a hand written note and leaves it at the house. The following week he has that one listed too. And so the real estate chain reaction begins.
I know to here are a hundred similar stories out there, and for each one there are ten others that end with one single transaction and plenty of lost opportunity because the agent didn’t do EVERYTHING, to ensure the chance of future business. You might even suggest that the agents just got lucky. Have you ever heard the saying “the harder I work, the luckier I get”?
There is another benefit of putting every ounce of effort into your listings. Your clients will know the lengths you went to and will recommend you to other people. So, get your business off on the right foot today. Agents fail because they go into the listing with the attitude that the house will sell itself. That might be true, but then what?
In a market where you are competing with 40,000 other agents, commission is no longer the competitive advantage. For ultimate longevity you need to go above the bare minimum of service. Not only will you sell the property but it will cause a chain reaction of events that will help grow your business and guarantee a fruitful career.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

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