Should showings continue after a conditional sale?

What’s the point?  If it’s already sold….

Sellers can be excused for not really wanting to continue with additional showings after agreeing a conditional sale with a buyer.  It is understandable that sellers might wish to take a breather, after all the preparations for listing the property and the rush and stress of the initial deluge of showings.

Buyers, too, generally have little enthusiasm for a property that appears to be already “spoken for” by another buyer.  After all, why get all excited about the property, when another buyer is in control of that property during the conditional period.  Many buyers are afraid that they will be disappointed after seeing the “one that got away”

Even buyer representatives can be somewhat reticent about investing time in showing a property that their buyer’s cannot buy.

For the above reasons and more, the number of showings on properties with conditional sales in place drops 90% or more.

…but what if the conditional sale does not “firm up”?

10-15% of conditional sales are falling through in our current market!
Given the current seller’s market conditions, extremely low listing inventory, offer dates and multiple offers, many more conditional sales are falling through than is usually the case.  Historically, conditional sales don’t complete only about 5% of the time but over the last 18-24 months this figure has grown to the point where as many as 10-15% of conditional sales are falling through! See the number of properties shown as being ” back on market”  in this recent 7 day snapshot from our Realtor dashboard.

See a previous post on why sales fall through here: http://blog.oasisrealtyottawa.com/conditional-sales-falling-like-autumn-leaves/

Property effectively “off the market”
Sellers will have missed buyers during the conditional sales period and there can be a bit of a stigma associated with a sale falling through.   Some buyers and their agents may wonder if there was some issue around inspection that surfaced to kill the previous deal, for example.

Both buyers and sellers should pursue showings:
A buyer may get a “leg up” on a such a property, should it fall through, as many buyers will have moved on and not be in a position to quickly get in to see the property, once it shows up as “back-on-the-market”  An aggressive buyer (and agent) may even want to submit an offer to show the seller their level of interest and if anything happens with the original buyer, they are then in a position to control the property. (still not a high % play, but if it is the “right” property, it may be worth the time investment.)

Sellers: be open to showings and keep the property readily available and accessible. 
We had an interesting experience recently where we booked a showing on a property that had been conditionally sold to find that snow had not been shovelled and the property was not accessible or safe for viewing.  Surprisingly enough, the conditional sale on that property fell through and it was back on the market a few days later. Also no surprise: our buyers had moved on a purchased something else in the meantime.

So while it is normal to lose interest in doing showings post conditional sale, all parties are best to remember “it’s not over ‘til it’s over!

Gord McCormick, Broker of Record
Oasis Realty Brokerage
613-435-4692              oasisrealtyottawa.com

 

4 hidden MLS listing sections buyers and sellers don’t get to see

Our MLS listings are very detailed and provide lots of opportunity for complete disclosure of information that is pertinent to buyers.  Like all things however, the quality of the listing is only as good as the quality of data input by the individual Realtor.  Also, a lot of brokerages don’t do a terrific job of oversight or quality control on their listings but this is a matter for another post.

What we do wish to discuss here, are the sections of the listing that can be very useful for a buyer to know and can also be critical to the success of the listing, as well as the buyer purchasing decision.

Here are some of the key sections of the listings that buyers don’t see:

Realtor remarks:
This short section allows the listing agent to detail ancillary information like listing conditions, closing date preferences, utility costs, special instructions, special assessments, rental items or lease obligations or other notes that are generally directed to the Realtor members but almost always are pertinent for buyers as well.

CTSO:
This is the acronym for “Commission-to-selling-office”.  This is critically important and both buyers and sellers should know what is contained in this small section.  This section tells the buyer agents what % commission is being offered on the listed property and may be the most important hidden section of all, since it speaks to compensation.

Many sellers don’t understand what is posted there for their listing and what effect it may have on a buyer agent’s enthusiasm for that listing.  Also, FSBO sites or “mere posting”   listings often show $.01 in this field with instructions in the Realtor remarks to contact the seller directly to understand what commission they are offering or not.

Buyers need to know what is shown in this section, as they may be liable to pay directly any difference between their contracted commission rate in their Buyer Representation Agreement and that offered by the specific listing.  While most commission rates to the selling office are 2.5%, they can vary widely.  Government relocations for example may be seen at only 1.85%.  Some brokerages offer 2, some 2.25 and some do a flat fee  commission amount for as little as a $3,000 commission to the buyer brokerage and representative.

Sales History:
The sales history section of the listing is very critical for buyers to see (and also sellers, prior to listing time) as this documents the current sales activity and most previous MLS® listing history.  It can be useful for buyers to know how long the property has been on the market and also what the previous sales timelines and results were.  For example, if a property had some kind of stigma, unique feature or location disadvantage and it took a long time to sell during previous listings, the odds are the same will be true again.  This buyer should try to remember this when calculating an offer price and also remember it in future when their turn comes to sell the property.

Noting when price changes or conditional sales have occurred is also relevant information contained in this area.

Listing attachments:
Our Realtor system has a feature that allows us to any number of attachments to the listing to provide further information such as floor plans, surveys, lease agreements, work orders, permits, upgrade lists, pre-listing home inspections, property appraisals, tax bills, maintenance records/history or any other pertinent record that helps the buyer representative better explain the home features and history to the prospective buyer.

This attachment field is not as well used as it might be, but more and more we are seeing useful and detailed information being added by the most conscientious and professional listing agents.

Both buyers and sellers should be asking their respective agents if there is pertinent information in any of these fields that are pertinent to their decision making.

Follow us on social media for more buying and selling tips and news on Ottawa real estate.  https://www.facebook.com/oasisrealtyottawa/  @OasisrealtyOTT

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692  oasisrealty@rogers.com
www.oasisrealtyottawa.com

buyer tips for tough 2019 seller’s market

With listing inventory at millennium lows (-25.3% vs 2017 and -42.5% below 2016 levels at year end 2018) it is more important than ever for Ottawa buyers to have a strong team in place and a plan for success in 2019.

Have an updated plan:
Make sure you have a plan and update it, if one is up to date with everyone on your buying team then a purchase will definitely go more smoothly with fewer surprises:
Here are just a few things to do to be ready for that dream home:
If you have been looking for a home for a while, it is also a good idea to revisit and update your plan.
-check with your mortgage broker to make sure there is no change in your prequalification level or mortgage rate and see if you can get a rate hold guarantee
-review with your mortgage broker whether a fixed or variable rate is best for you.  70% of mortgages are still fixed rate but variable has been most advantageous over the long run.  Understand the pros and cons for each and plan based on what works for your circumstances.
-speak with your lawyers office and make sure you are up to date on all fees, and other disbursements the lawyer will make on your behalf, including land transfer tax (LTT), title insurance, mortgage insurance (if less than 20% down)
-check with your insurance broker, so you know what information they will require to provide appropriate insurance coverage and if there are any potential issues with a  property under consideration.

Price range:
If you have not been successful in finding an appropriate property, do you need to bump your price search range up to a higher level?

Focus on specific housing type:
Have you evaluated all options in potential housing and narrowed down your criteria to those that suit best?  There is an old saying that home buying is as much a matter of elimination as it is of selection and this is quite true.  The more one can focus on the type of house they are looking for within their financial plan, the better

Geography:
-do you need to add to or subtract from your geographical area of search?  Again, the more focused one is on a particular area or region, the easier it is to stay on top of new listings.

Are partners on the same page?
Being one the same page with a spouse or partner is critical in a successful home purchase.  If there are differences of opinion, try to get these ironed out before you start seeing homes and making offers.  If priorities are too far apart, getting a successful deal done will be painful.

Do you have your buying team in place and up to date?
Do you have a mortgage broker? Realtor? Lawyer? Inspectors? Does your financial planner need to be in the loop?  Are they all available right now if your dream home gets listed tomorrow?

How are you funding the down payment and deposit?
First time buyers will want to review this, especially if these funds are coming from an RSP or TFSA.  Typical deposit on a deal is about 1% of purchase, so $3,000-$5,000 paid at time of sales agreement for the average priced property.  Buyers may wish to offer more though, if they feel it adds strength to your offer, particularly in potential multiple offer situations.

Builder new home deposits are much higher, generally in the 10% of purchase price range, although buyers will have about 60 days to provide these funds in installment payments.

New construction vs resale:
If you are considering a new construction purchase, please make sure your Realtor knows, as they can help immensely in co-ordinating visits and providing advice on lot selection, features, upgrades and builder recommendations.  Realtors are involved in 85-90% of resale transactions but probably only 25%-30% (or less) of new construction transactions, so many of these buyers are purchasing without anyone directly representing them.  (…kind of like going to court without a lawyer…)

Multiple offers and bully offers?
Have a strategy for dealing with multiple offers or “bully” offers.

With our low listing inventory environment, these types of situations occur more frequently, especially for those shopping in the $250-$500K range.  Understanding how these work and determining if and how you will participate, is good to discuss in advance.

Be an ‘active” buyer:
-keep an eye out for new For Sale signs in your area of interest.  Especially look for those that say “coming soon…” or “Exclusive Listing” as these will not immediately appear on MLS® and may even be sold prior to an MLS® public listing being posted. Give your realtor the name of the listing agent and the address of the property and they can follow up for you and get you in to see the property.
Ditto, watch for online postings in facebook groups or kijiji or other online real estate sites that may show listings that have not yet made it to MLS®.  Some buyers and agents are advertising future availability, too and while these can be tricky and not that often successful, they may well could be an opportunity.

Be aggressive and decisive: don’t fret overpaying
Don’t wait for an open house, try to get in to see a newly listed property as soon as possible.
If you have a good market knowledge and see a property that ticks all your boxes, be ready to make a decision and go for it.  Many buyers can be a little nervous about overpaying but remember that if our upward market continues, this property is likely to be worth $20-$30K more next year and you want to get in to the market as soon as possible.  Your Realtor will help guide you in appropriate pricing strategy.

2019 is expected to be another challenging year for buyers, so have a good plan and work closely with your Realtor for success this year.  If you do not already have a Realtor, we strongly suggest you engage one now to improve your chances in finding and securing your dream property this year.

We would be happy to discuss if our approach and philosophy is appropriate for you, if you would like to discuss, please give us a call at 613-435-4692 or check us out at oasisrealtyottawa.com or our facebook or twitter platforms @oasisrealtyOTT or https://www.facebook.com/oasisrealtyottawa/

Gord McCormick, Broker of Record
Dawn Davey, Broker Oasis Realty Brokerage
oasisrealtyottawa.com

Is a “shallow” well a concern when buying a country property?

would you know what this is ?

 

We had a very interesting experience when showing a country property recently and thought it a worthwhile note for those considering the purchase of a country property which is served by a private well and septic system.

We noticed the item shown in the photo and originally assumed it was the lid and riser for the septic system and in fact, the green lid is identical to those that can be found on a septic “riser”.  However, as we continued our tour of the property exterior, we noticed the septic tank area was behind the house.

With able assistance from Moe Rayyes of Canadian Water Inspection Services https://www.waterinspection.com/services  and with confirmation from the seller, we confirmed that the equipment in the photo was in fact, the cap for the “shallow” well system which serviced the property.

So what is a “shallow” well and how does it potentially affect a buyer?

A “drilled” well is by far, most common:

The listing for the property indicated that the property had a “drilled” well which is the most common type of well used to service country properties.  These are drilled to a depth and location that provides the best possible quality and quantity of water available to that particular property.

Shallow, dug and sand point wells: Pros and cons

Other types of wells are also out there and many provide reasonable and cost effective sources of water in areas with springs, high water tables and where drilled wells may be costly or otherwise problematic.  One such problem might be that the underlying aquifer does not have good quality water. ie too much salt or other mineral.

The potential disadvantage of the above type of wells is that by being closer to the surface, they are potentially more subject to bacterial contamination. (often one may see a UV light system to mitigate this potential issue) They can also be prone to water limitations during drier years, especially between May and October.  Sometimes these can even run dry and require tanker trucks full of water to replenish them until ground water levels get back to normal levels.

Should a buyer avoid a home with these less common water systems?

Many country homes are well serviced by such wells but in addition to some of the potential issues noted above; these type of systems make a property somewhat unique and generally speaking, unique features and systems may not be well understood by future buyers (and Realtors) and therefore, market value and marketability may not be as good as more standard homes.  We also know of several homeowners have been forced to truck in loads of water in dry summers to keep their well supplied for household requirements.

In the case of our buyers in this instance, they chose to pass on this property-even though it seemed to have very good value at the price.  In addition to the shallow well, it also had an original septic system which was 40+ years old which represented another risk and near term financial cost to our buyers.

As always, buyers should always get both a septic inspection and a well and water inspection from qualified professionals, (in addition to a general home inspection) when purchasing a country property.

If you are considering a purchase of a country property, we would be happy to you navigate the bumps and potholes that may be encountered along the way.

For additional information to consider before shopping for a country home, check out an archive article on our previous blog here:  https://www.oasisrealtyottawa.com/blogs/gord_mccormick/archive/2014/01/31/what-we-city-slickers-need-to-know-about-country-properties.aspx

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692  oasisrealty@rogers.com

Oasisrealtyottawa.com

Optimizing real estate fees for sellers

 

 

 

 

 

 

 

 

 

Why Ottawa will have the best winter sales in a decade or more

sales should help “warm” Ottawa winter

Ottawa real estate normally pretty much hibernates from late November to late February but this may not be the case this year.  Buyers and sellers will want to consider the following factors and consider whether they wish to move up their buying or selling plans accordingly:

 

Listing inventory at decade lows:
The level of available properties to purchase continues to be extremely low and the number of new listings coming on the market, shows no signs of reversing this trend. Supply/demand alone would suggest that this has to put more upward pressure on selling prices.

Residential listings are currently 17.5% lower than last year, 35.5% lower than 2016 and 48.8% lower than 2015.

Condo listings are 34.5% lower than 2017, 45.5% lower than 2016 and 55.8% lower than 2015.

Even rental listings are down quite significantly, 31.6% lower than last for MLS rental listings.

Beat the price increase!  Your next house is going up $2-3K a month!

With residential prices on the way up (+5.7% through Oct 2018) that dream house is getting more expensive day-by-day.  For example:  a $500,000 property today may well be $525,000 or even $530,000 by the end of 2019 peak selling season.  That’s an increase of $2,000 to $2,500 per month and with mortgage rates also headed north, the cost of servicing a mortgage is also increasing.  The mortgage “stress test” which is typically 2% above the mortgage rate being offered is also moving upwards as rates rise thus making approvals more challenging for some buyers.

New construction price and availability:
Builders are also facing limited availability, after two record years of sales and also are facing some labour shortages and price pressure.  All of these factors will also continue to push up the price of new construction.

Mortgage rates:
Rates are pretty well guaranteed to rise a half point in the next 6 to 12 months, with an outside chance of going up a full % point.  This adds challenge to the approval process (mortgage stress test) and monthly cost for buyers and homeowners, so buying now and locking in at a lower rate will have some advantages. *new construction buyers will have to make sure they get a guaranteed rate from their mortgage broker or bank to cover them for the longer new build timelines.

Local economy is strong:
The local economy seems pretty solid regarding employment and there appears to be no signs of the Federal Government doing any significant belt tightening in advance of next year’s election. (Though one never knows?)  So our market should continue its current moderate upward path in the immediate future.

Provincial and municipal budgets:

A “new” city council in Ottawa is in place and we also have a relatively new Provincial government in Toronto.  The Provinces’ fiscal challenges are well noted and there are also signs that the City of Ottawa has its own issues.  Here are a few things that could happen that might add cost for buyers and sellers:

  1. If Ottawa council feels really in a budget pinch, is it possible that a Municipal Land Transfer Tax (MLTT) could be implemented here? This would add $5,000-$10,000 to the typical residential purchase transaction cost here and would cause a bubble and price run up in advance of implementation.   To put this in perspective: the total land transfer tax on a $500K home would jump to almost $13,000 and $21,000 for a $700,000 home purchase.
  2. What is the Provincial government going to do to fix their huge fiscal problem? Could they raise the level of the Provincial Land Transfer Tax? Add some other “luxury” or other tax on housing?
  3. Could Ottawa raise development charges which once again adds to the cost of new construction homes and condos?
  4. What effect will “inclusionary zoning” have on costs of new construction? This principle requires builders and developers to include provision for lower cost housing in their new projects but will certainly affect the cost of new properties, as it becomes more prevalent in the near future.
  5. Do the Feds have any plans in their National Housing plan that might affect buyers, sellers or homeowners?

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage

613-435-4692 oasisrealty@rogers.com

Optimizing real estate transaction costs

 

Moving to Ottawa in 2018? …here’s how to get ready:

 

It could be “slim pickings” for buyers in 2018 Ottawa real estate:

The Ottawa real estate market has been improving steadily since spring 2016 and 2017 was probably the best year in a decade, with overall unit sales up 10.2% and prices up 6.8% for residential properties and 3.4% for condos.

The good news is Ottawa is still very affordable compared to many places across the country and one of its most stable markets.

Average selling prices 2017:
Detached single home: $ 451,306   +7.6%
Row townhome:            $ 343,958    +4.9%
Semi-detached home:   $ 420,042    +5.7%

Apartment condo:         $ 298,537    + 3.7%
2 story town/condo:     $ 230,141    + 2.9%

Tougher news for buyers will be scarcity of listing availability in 2018 and definite upward pressure on prices, as listings have fallen to very low levels all across the city.

New listings were down 8.7% over the course of 2017 and that trend is worsening already in 2018 with new residential listings in January down 30% compared to the 5 year average. Overall listing levels are down 21.7% for residential listings at year end and 27% for condos.

With increasing numbers of sales and lower numbers of new listings, the supply-demand balance will be swinging even more in favour of sellers, so buyers will have to be very aggressive and prepared for a tough seller’s market.

Here’s some things to do to be ready to buy:
1) have your team in place, so you are 100% ready to buy: Realtor, mortgage broker, insurance broker, inspectors, lawyer.  Make sure you and your spouse/partner are on the same page concerning priority level of housing features.

2) know your financial plan and pre-qualification levels before even looking at a property. Know whether you will need a property appraisal and if the new 2% qualification threshold applies to your file. Understand home operating and utility costs, as this may vary from your existing geographic location.  For example:  property taxes may be higher or lower and ditto for heating, electrical or water costs.  Ottawa has much higher property taxes than Toronto per $ of assessment, for example and we also have rental hot water heaters which those from out of Ontario may not know.

3) have a realistic target of home by type, area, features and price and narrow that as quickly as possible. No sense chasing rainbows in a tough market for buyers.  Wishing you can get the $525K house for $475K will not make it so.

4) have a plan for multiple offers. Well priced new listings will be attracting multiple offers, so discuss your position in advance with your Realtor.

5) consider builder quick occupancy inventory, as many builders are building some homes on spec to be available for peak delivery months ie summer.

6) search online for exclusive listings and other non MLS® posted properties. Many are “trying” listings out on 3rd party sites and social media before posting on MLS®, so you may find listings on social media groups or via search engine alerts.

7) drive through your geographic areas regularly (if possible) to look for new lawn signs popping up. New ones may have toppers that say:  “coming soon” or “exclusive” listing.  These may be good choices if you can find them before other buyers.  The fragmentation of listings from the central MLS® system makes it difficult for buyer agents to stay on top of all new listings appearing in your areas of interest and one cannot be satisfied that electronic means will be sufficient in getting you in to see the hot new listings, before other buyers.

If we can assist with your Ottawa purchase plans this year or answer any questions, please do not hesitate to call 613-435-4692

Gord McCormick, Broker of Record and Principal Broker
Dawn Davey, Broker
Oasis Realty Brokerage
oasisrealty@rogers.com

https://twitter.com/OasisrealtyOTT https://www.facebook.com/oasisrealtyottawa/   http://blog.oasisrealtyottawa.com/

 

Let’s dispel a major myth about Ottawa real estate in the summer!

Let’s dispel a major Ottawa real estate myth: that summer is “dead” in real estate

It has long been held that summer is dead in real estate and things pick up in the fall…but is it really true?

….not so much, as our research has proven! (See monthly unit sales chart)

We hear this all the time from sellers, home owners and even other Realtors who seem to think that there are two “prime” or “peak” seasons in Ottawa real estate: spring and fall.  We hear statements like “everyone is on vacation” or “gone to the cottage” etc. thus explaining why real estate “dies” off in the summer and somehow is magically reborn and “things pick up after Labour Day”.

While it is true that summer sales do dip compared to the super peak season in May and June, July and August are the next best sales months the market will see until the following April, so serious buyers and sellers should not put their real estate plans “on hold” until the fall’s purported “2nd season” in the Fall.

Summer unit sales: July and August 4th and 5th strongest months

Sales in July and August are some 20-25% less than those in April-May and June but are still usually well ahead of sales in September and October which are a further 10-20% lower, followed by November when sales start to go in to the winter hibernation phase of Ottawa real estate.

New Listings and total listing inventory are also typically higher in the summer months than in the fall and winter, so it is a great time to be buying also.

How did this myth get started?
…hard to say but possibilities include:
After a busy spring season, some Realtors may be looking for a bit of a break themselves, which is hard to do when one has to be “on call” and readily available close by to support a new listing or buyer client. So if a buyer or seller plans can be deferred a couple of weeks, the Realtor can sneak in some summer vacation time for themselves.

Also, some Realtors may feel that for whatever reason, a certain property may get more attention in the fall or they may simply be trying to save some business activity to anchor the balance of their business year, especially with the typically slow winter season approaching from mid-November on.

There may be some valid reasons in terms of market circumstances, competitive listing inventory, seller vacations, property preparation for listing and so forth but let us be perfectly clear: don’t delay listing your property in July or August because you think business is stronger later!

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or 613-371-9691
oasisrealty@rogers.com

One of Ottawa’s best liked/followed real estate pages: https://www.facebook.com/oasisrealtyottawa/

Our real estate guide/blog: http://blog.oasisrealtyottawa.com/

2 experienced brokers working for you…11th year in business!

 

 

Seller’s market in Ottawa real estate May 2017?

Record sales in May 2017

 

Ottawa real estate had record unit sales in May and the combination of all indicators suggests we are either in a seller’s market or very much on the verge of one.

Sales and prices were up and new listings and overall listing inventory were down thus making for a good month for sellers and listing agents but not so much fun for buyers.

May is typically our busiest sales month (followed by June and then April) as our market is boosted by families looking to move before school starts in September and also a strong transition of government staff (primarily military and RCMP) moving to and from our area.

Unit sales strong:
Residential unit sales up 12.4% for the month, condos up 44.6%
The number of residential units sold in May was 1856 vs 1612 a year ago.
Condo unit sales were 444 vs 307 in May 2016

On a year to date basis through May, residential sales are up 12.4% and condo sales up 27.1%.

Average prices increasing nicely:
The average price of a residential property sold in May was $436,625 and increase of 7.4%.

The average condo sold for $270,993 in May an increase of 2.3%.

Year to date increases for residential properties sold is trending up 6.7% and for condos 4.9%. This is our best average price growth in 5 or 6 years.

Listing inventory continues to be the key indicator to watch!
New listings continued to slow with condo listings lower than May 2016 by 6.3% and the # of new condo listings down by 13.2%.

Overall, the number of new listings is 10% lower this year to date.

End May listing inventory signals more demand in coming months!

The combination of strong unit sales increases and a lower number of new listings leaves us at the end of May with 25.3% fewer available listings in the residential market and 22% fewer condos that in 2016.

This means more competition for available listings in general and thus favours sellers. On an area by area basis this may vary but it does jibe with what we are seeing daily in the market.

New listings to sales ratio indicate seller’s market conditions during May:

The number of residential sales (1,856) to new listings (2607) yields a ratio of 70.2% and this is almost Toronto high! (a ratio above 60% is said to reflect seller’s market conditions, with 40-60% representing a balanced market and less than 40% a buyer’s market.) On a year to date basis the ratio is 58.8%, just short of a seller’s market

Condo unit sales for May (444) vs new listings (734) yield a ratio of 60.4%, also just in to seller’s market territory. On a year to date basis the condo ratio is 46.8% which suggests a more balanced market.

What can we expect in the long, hot summer?

We are certainly seeing more multiple offers and offers days being established by sellers and their listing agents, especially in key geographic areas and price points. Sellers should discuss their pricing and marketing strategy with their listing salesperson to determine the best course of action for their circumstances.

Buyers want to be on top of new listings (and price changes) and not wait for an Open House to go and see a property that may interest them.

Both sellers and buyers will also want to determine their own position on how they wish to participate in a multiple offer situation, should one materialize.

Why pay 5% commission to sell in a “hot” market?

Buyers and sellers need their salesperson or brokers’ advice just as much in a hot market as in a slower one….but do you really need to pay 5% commission on the selling side?

If you don’t think so, give us a call and we can explain our options that will *save you 26% to 50% of the selling fees on your sale. 613-435-4692

*not intended to solicit those with existing listings. Savings based on our range of listing commissions vs typical 5%.

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692   oasisrealty@rogers.com
Oasisrealtyottawa.com

 

An experienced, effective and inexpensive residential brokerage

 

Is there a shortage of quality listings in Ottawa real estate?

 

It wasn’t too long ago that buyers had the upper hand in Ottawa, as we were saddled with excess listing inventory, flat sales and very low average price increases. It is looking like 2017 may be a whole new ball game though and we may be in the first stages of another seller’s market, which we have not had  for at least 5 or 6 years.

2016 was a transition year:
Between 2013-15 we experienced a period of excess listing inventory which combined with flat sales and price increases, created a market favouring buyers in general. (Although some high demand urban neighbourhoods may not have experienced this quite as much)

Starting about a year ago, we have seen unit sales improve consistently and though prices have remained fairly flat until recently, the number of new listings and overall listing inventory has decreased steadily…a good sign!

Overall listing inventory right now: (early March 2017)
Our current available listing inventory is well below (20%) some peak levels experienced in 2015 and new listings continue to lag behind by approximately 10%. Unit sales improved in 2016 and currently seem to be improving further.   As these trends continue, we end up with a supply/demand shift favouring sellers and more competition among buyers for fewer available listings.

“Chronic”, overpriced, stale or unique listings:
There is always a certain percentage of listings that fall in to this category and these lower demand listings are bypassed quickly by most buyers. Though these listings are shown in overall “available” listings totals, they are not in high demand, regardless of the improved overall environment.

One buyer example:
In doing a search for a current buyer, we found the following out of 31 listings that met their general specifications:
Chronic listings on the market for extended period: 9 listings or 29% (anything beyond 90 days we consider chronic which means either the property has a problem and/or is overpriced.)

Busy street or other location issue: 7 (this young family does not want a primary or secondary collector street)

Unique listing or one with an obvious issue: 5 (not looking for a fixer upper or one with has obvious resale challenges in future)

Total: 21/31 listings or 67.7% of available listings are not viable for this particular buyer couple, leaving only 10 properties to consider. So while there might seem to be a fair number of listings, there really is not for these customers.

As it turns out our buyers have submitted an offer on one of these properties but it looks like it will be their 2nd go round in a multiple offer situation, in as many weeks.

New listings sell fast:
The sell through of new listings at this time of year is 50% or more of new listings selling in less than 30 days, so buyers don’t have a lot of research and decision making time. Being prepared and having a well prioritized search can really help ensure one is ready to jump on new listings, as soon as they happen.

Bottom Line:
There is not a major shortage of overall listings (a la Toronto) but the demand for quality listings is improving and in many cases,  greater relative to supply, so buyers and their representatives need to be on top of their game or someone else will beat them to the hot new listings hitting the market.

Having a Realtor buyer representative fully engaged in one’s search is even more critical at this busiest time of the year.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage

www.oasisrealtyottawa.com   oasisrealty@rogers.com

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Multiple offers puts additional stress on all parties

lots of twists and turns but ultimately only one across the finish line
lots of twists and turns but ultimately only one buyer gets the prize

Our Ottawa market is showing some strong signals that we may be seeing a return of seller’s market conditions, with stronger demand, rising prices and the increase in the number of multiple offer situations. This can be a stressful experience for all parties, particularly buyers who have not experienced the process.

We recently competed in a multiple offer (representing a buyer) on a detached single home in the south end which attracted 5 offers within 48 hours of being listed on MLS®. We were not successful with our offer and our buyers were very disappointed but we gave it our best shot in the fast paced process surrounding these types of situations.

Here are some of the key challenges in the process:

Compressed timelines:
The listing was just posted on MLS® later on Monday. We alerted our buyers to the new listing that evening and requested a showing directly via the listing agent that night.  We actually viewed the property twice on Tuesday, once with one of our buyers and the 2nd time with both buyers. (one of our buyers was actually able to take the day off  work to get in to see property as early as possible)

We submitted an offer on Tuesday evening that was slightly over asking price, as we expected that demand would be reasonably strong given the amount of showing activity on the listing. We were aware of the fact that another offer was pending and it had been submitted just prior to our own offer.

Our buyers revised their offer price upwards, based on the 2nd offer.

The listing salesperson had now established an offer presentation time for Wednesday later afternoon. By early-mid afternoon Wednesday, we were aware that there were now a total of 4 offers registered on the property.  (there ultimately ended up being 5 offers submitted)

Our buyers revised their offer price upwards a 2nd time to their absolute maximum and we submitted revised documentation to the listing sales person.

Buyer roller coaster:
Buyers are caught on a roller coaster of emotions: from the elation of seeing a property they both really want in their price range and area, to happily submitting an offer which is over the listing price and hoping there are not too many offers, to frustration from waiting around without any control of the situation, to stressing about how much one should offer and avoiding temptation to overpay or remove some important condition from the offer which may help “win” the property bid but prove costly later, to the anticipation of waiting and hoping your offer will make it to the top of the pile, to the disappointment that comes from finding out that it was a good offer but not quite good enough.

Sellers are happier but not stress free:
Sellers are definitely the beneficiaries of the best possible market value in these scenarios but they are certainly not stress free. This young family was pretty much shut out of their home for the better part of 2 days while buyers and their agents toured the property.

These sellers also have a home they are buying, so until their own property sells and firms up, they are not 100% sure of securing their own dream home. Even if it looks pretty good right now, it is still not over until the final paperwork is done with any buyer conditions satisfied.

Buyer representatives have a lot of conflicting pressures:
All buyer representatives want the right property for their buyers and at the right price. While one-on-one negotiations with a listing agent and seller have one set of challenges and variables, multiple offer situations are completely different and the buyer representative has far less control or influence over the outcome.

Price, closing date and conditions are the critical factors and we want our buyers to win but not pay too much or sacrifice important conditions. i.e. like foregoing a home inspection or not including a financing condition.

Add to this the uncertainty of knowing what the “winning” price might be and how to properly advise buyers is a challenging task.

No “cake-walk” for the listing salesperson, either:
The listing sales person has their own set of pressures in professionally representing the seller, co-ordinating access for showings, communicating on a timely basis with all interested parties and running a well-organized and credible multi offer submission, advising sellers on bid selection, negotiations and debriefing all who have submitted offers. This is a pressure packed process for them as well.  In this case, we had a very professional listing salesperson who very ably managed all of these from our vantage point.

Everyone’s life is “on hold”:
All parties to these situations are pretty much “on call” as the dynamics of these situations unfold and the process lurches towards a conclusion. Don’t miss out on a phone call, text or email-as you may lose out on timely information or ability to act upon that information. When the ultimate prize is so important, everything is circumspect and under a microscope.  Did we do everything we could?  Was there more information we should have had?  Should we have been more aggressive?  How much risk should we take?

This is definitely starting to look like a “you snooze…you lose” kind of market:
What about the buyer representative who missed the listing or the buyer who wasn’t quick enough to even get in to see it? What about the buyer representative who wasn’t available to get their buyers in to see the property?  What about the buyer who said: “let’s wait for an Open House”?

Bottom Line:
It is always disappointing to “lose” but our buyers did everything they possibly could and are moving on to the next one. Our job is to find them an even better one than the one that got away and it’ll happen for them!

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
www.oasisrealtyottawa.com   oasisrealty@rogers.com

One of the highest ranked and “liked” real estate pages:  https://www.facebook.com/oasisrealtyottawa/

“all the real estate news that’s fit to tweet”  https://twitter.com/OasisrealtyOTT

One of Ottawa’s best real estate blogs: http://blog.oasisrealtyottawa.com/

A full service, boutique brokerage with lower listing fees