Here at the Williams and Follows Team we currently have a large number of Buyers who will not list their homes until they find one to purchase. This creates a “Catch-22” situation of Sellers not listing their home, adding to the shortage of homes to buy. Historically low-interest rates have helped inflate a large pool of buyers.
Everyone has an opinion of where the market is going but it’s important to address a few of the perceptions we’ve heard over the past while.
Buyer – “I’m going to wait until the Spring when more homes come onto the market.”
This is the common perception, but it didn’t happen this year and it may not happen next. We were in the midst of the 3rd wave last Spring and this suppressed listing activity. In fact, we didn’t really have a spring surge. COVID could create havoc again or, folks may still not list their homes if they don’t have a good one to go to so, no guarantee of more listings in the Spring.
Advice – If you’re in the market now for a home, don’t stop looking over the winter months. More buyers come into the market in the Spring and this will create more competition for homes. You only need one, good opportunity to find a great deal and that may just come along on the snowiest, coldest day of the year. Don’t limit yourselves to Spring markets. They’re unpredictable.
Buyer – “I’m going to wait for prices to ease.”
If I had a nickel for every time I’ve heard this! Some people think prices have got to give and they’ll suddenly go down. First, if this happens, the price you get for your home will also go down. That’s how markets work so it’s all relative. Second, when is this “easing” going to happen? It’s going to take some rather notable events to slow this train down, like interest rates increasing, supply increasing to meet demand, demand decreasing to meet supply, economic downturns or any other number of catastrophic events. These are impossible to predict but for now and we don’t see any price drops in the foreseeable future.
Seller – “I’ll have numerous multiple offers and sell $100K above asking in 3 days.”
We hate to burst any bubbles but even in a frenzied market certain principles still apply, like how the home is priced at the outset, location, condition of the home, negotiating skills of the agent, closing dates, special conditions etc.
Advice – keep your head on straight, work hard to present your home beautifully, do the necessary fix-ups, make it easy to accommodate showings and don’t put up barriers to getting the home sold. If you haven’t done on-going maintenance buyers are going to be quick to pick up on the deficiencies. Buyers want turn-key and yes, they’re willing to pay for it but make sure you home fits the bill.
Buyers – “I can get my deposit back.”
There’s much confusion about deposit money; the money you put forward with the Offer that gets applied to the purchase price on closing. If you back out of the deal during the Conditional period, it’s likely your deposit will be refunded as the Condition in the Offer states. But know this can be contested by the Seller, so don’t assume it’s entirely automatic. Also, with a firm deal where they are no conditions in the offer, or where the conditions have been waived, the deposit will not be refunded to you if you back away or breach the contract. The deposit will sit in the Brokerages trust account until direction is given by the Seller or the Courts if lawyers become involved. If the Seller has suffered a loss due to your breach of contract, the Courts will likely award damages, in the form of the deposit, to the Seller.
Sellers – “I can sell high but I want to buy low.”
There are some good deals right now in Gary, Indiana but if you want to buy on Canadian soil, it’s not likely you’re going to get a deal for something you’d be proud to live in. Prices are up right across the country. Especially if you’re selling and buying in the GTA. Sellers have been shocked at how much homes cost, once they’re on the buying side. It’s so drastic that it’s one of the contributing factors to Sellers not listing their homes.
Buyers – “Realtors are the cause of high prices on homes.”
Can we debunk this once and for all? The Realtor and Seller, in consultation, will set a list price that hopefully serves the Sellers best interests but the Buyer always sets the sale price. No one else but the Buyer can do this. That sale price can be higher or lower than the list price. Lately, it’s been higher by astronomical amounts versus historic standards. Part of that is strong demand and part of it is realtors/sellers setting list prices that are far below market values to get more offers on the table but, when you have 20 people bidding on a property, the highest bidder is going to set the price.
If you’d like some straight up information about the current market, please reach out to us at 905-442-5847 or email: firstname.lastname@example.org / email@example.com