3rd largest sales month:
April is typically the 3rd largest unit sales month of the year and this year looks to be no exception. Despite an ever lingering winter, sales have been strong through the first 3 weeks of the year.
Our totally unofficial numbers suggest a sales increase that will be at least in the 10-15% range for the month which would take us over the 2,000 mark for combined residential and condo monthly sales. (last year there were 1,795 properties sold in April and the 5 year average was 1,613.)
April is typically the 2nd largest month for new listing activity and listing activity looks pretty strong this year also and should be equal to or greater than the number of new listings in April 2017. Given our very tight listing inventory situation, this would be some good news for buyers, as new listings have trended down for much of the last 18 months, but with sales trending strongly up, sellers’ market conditions are expected to continue.
Total listing inventory:
Our current overall listing inventory is not even enough to cover sales for two months, when normally a balanced market would be 4 or 5 months of listing inventory, so no respite foreseen from our current tight inventory with the number 1 (May) and #2 (June) sales months next up.
Sales to new listings this month:
Again unofficially, our numbers show that the ratio of sales to new listings (and key performance indicator in real estate) is 70.4% during the month of April thus far. For reference: a balanced market is said to exist when sales: new listings is between 40-60% and a buyer’s market when the ratio drops below 40%.
Sales cancellations continue on the higher side:
Typically, about 5-6% of conditional sales fall through and do not “ firm” up and result in a completed sale. Our current run rate on this stat is more like 10-12% or double the normal. Financing and inspection issues are the principle cause but good old fashioned buyer’s remorse may also be a factor in a hot market where buyers have little time to consider whether to purchase or not.
What to expect?
Expect to see a lot of exclusive and “coming soon” listings, offer dates, “ bully” offers and multiple offers. The next few weeks are also the main time for out of town buyers (mostly military, RCMP and other government employees relocating) to be in the market, so activity will be fast and furious.
Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
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%
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 email@example.com
Listings (or lack thereof!) continue to be the dominant story in Ottawa real estate based on 3rd quarter results through the end of September.
Almost 3,000 fewer listings than at the same point only 2 years ago!
New listings in September are down 10.5% for residential properties and 20.3% for condos vs last year and 22.6% and 26.8% vs 2015.
Total listing inventory at month end is down this year 20.1% for residential listings and 24.1% for condos. Compared to 2015, listing inventory is down 35% for residential and 33.6% for condos. Combined this means the current market has a 2,922 fewer properties available for sale at the end of September than the same point in 2015.
Sales up, inventory down, scarcity looms
With total sales demand up 12.1% vs 2015 for residential and 24.6% for condos, it is easy to see how we are seeing average prices rise and more multiple offers.
Residential sales: price growth fuelled by demand
Unit sales were actually down 1.8% in September but average selling price was up 8.2% to $416,464. On a year to date basis, residential unit sales are up 6.6% and the average selling price is up 7.2% to $425,139.
Condo market continues to show strength:
2017 has been one of the best condo markets in many years with unit sales thus far up 23.5% and the average selling price up 4.6% at $272,220.
Sellers benefit in this market but of course, those who are also buying face a challenge on that end. One of the basic facts of real estate is that those who own a home are stuck both buying and selling in the same market conditions, so while one may gain on one side, they suffer on the other.
Buyers face more multiple offers, a very fast moving market on new listings and limited decision making time.
Builders have had a record year from anecdotal reports and we can certainly confirm that builder prices have been increasing and buyer incentives decreasing in the face of strong results and limited listing inventory in new construction also. Buyers are encouraged to keep an eye on new lot or phase releases or in demand inventory homes. Also take your Realtor with you to the sales centre and consider asking for a “hold” or “reservation” for a short time from the builder, if possible.(though builders may also be tightening up on their willingness to accept such good “faith” agreements)
Bottom line and what to expect:
Though mortgage rates are creeping up with the Bank of Canada recent rate changes and there are continuing steps to tighten mortgage qualifications, our market appears pretty solid and poised for more growth.
Investors are still trying to figure out how new rental rules from the provincial government may affect them, so we could see some slackening in demand from this sector as a result.
As long as the federal government does radically alter their headcount and spending plans going in to the latter half of their mandate, our local economy should continue to be fairly buoyant and allow us to continue with the positive real estate trend lines which have been strengthening for the last 18 months.
This could be the best fall and winter in the last decade to be listing a property, given all the foregoing, so sellers should be reasonably confident they can find a buyer even in our historically seasonal hibernation between mid-November and mid-February.
Buyers should keep a close eye on the market as there may be some off season listing gems hit the market from sellers who have been awaiting a new build completion and have to list in the off season to accommodate their move in plans.
Our Ottawa real estate season tends to “bloom” in the spring with the greatest portion of resale transactions being done from March 1st to September 30th. We do not have access to stats on new construction sales but we suspect they may follow a somewhat similar pattern.
A strong argument can be made that fall and winter may be the best time to purchase a new construction home from a builder. Here are some of the factors that work in favour of buyers purchasing during these somewhat quieter months of the year.
Less frantic buying environment:
When it is peak selling season (or a major launch) builder sales centres are packed and this puts extra pressure on buyers to “make a deal now” before someone else reserves that special lot. This can result in an almost timeshare or boiler room atmosphere which is not conducive to well-reasoned and researched decision making. Buyers may be swayed more by a “fear of loss” motivation and thus make some hasty decisions. This is fine if one has done one’s homework but it can also produce impulsive and immature buying decisions.
This environment and the genuine risk of losing out on an opportunity should be slightly less during quieter selling months.
Closing date a critical factor
Most new home deals being signed in the fall or early winter, will call for deliveries in the summer or early fall of the following year. Buyers will really want to consider all aspects of how this availability date impacts their individual situation, as there are both pros and cons and builders have limited ability to adjust scheduled deliveries to meet buyer criteria in a significant way.
Sale of existing home timeline is also critical Those with an existing home to sell will want to be able to sell their property during the peak selling season, if at all possible. Understanding the timelines is important: ie. When should I list my house to meet the builder closing date? How long will it take to sell? How long will it take to close? How much am I going to get from the sale of my home? A Realtor can help with all of these items and more concerning a new construction home purchase.
Design Centres may also be less busy and stressed A critical stage of the home buying process is getting the design centre options researched, decided and planned. This timeline can be daunting for those who have not done it before and if a builder design centre is super busy or understaffed this can impact the process and the quality of the buyer decisions and ultimately, the finished product. Since you only have a short window to get these choices right, it may be advantageous to do this phase in a quieter time of the business year for the builder.
First time buyers RHOSP “double dip” First time buyers using their registered home ownership savings from their RRSP, may be able to make a savings deposit for the current fiscal year and qualify for that year’s tax deduction, as well as being able to utilize those funds for a purchase the following year. There are some rules around this, as funds must be present in the RRSP account for at least 90 days, before they can be withdrawn for home buying purchases. Check with your mortgage professional to check on each specific situation.
Saving and planning time Having several months to plan a move, allows time for additional saving, facilitates scheduling and also allows time for the purchase of new furniture, appliances or household items.
Don’t forget your Realtor!
Many new construction buyers forget to get their Realtor involved early in their new construction home buying cycle. A Realtor can be a really good “Coach” in helping plan and execute a new home purchase. Those buying new construction for the first time and those with an existing home to sell can very much benefit from Realtor experience and counsel. So…”don’t go to the builder sales centre without them”
New construction is one of our core areas of involvement and we are always happy to discuss and advise for those who are already not already working with another Realtor. We feel we have a bit of “inside track”, too-as we have been listing new construction homes for a major Ottawa builder for7 years now. So give us a call at 613-435-4692, if you have some questions about how the process can work for you.
Ottawa listing inventory down 25% vs last year, 40% vs 2015
The Ottawa resale estate market is getting more than light on inventory after a year and a half of increasing unit sales coupled with a 10%+ decrease in the number of new listings, the overall market is down 25% on the number of available listings compared to a year ago and almost 40% from two years ago.
Even worse in Kanata! As we approach the end of August, Kanata has barely one month’s worth of listing inventory to feed residential sales and about 3 months of condo sales. Normally, 4-6 months listing inventory is deemed to be a “balanced market”
How is this translating in to sales results? Sales results have been surprisingly mixed with residential unit sales up 4.1% through July 2017 and condo unit sales up 22.6%. Somewhat surprisingly, residential sales are up an average of only 2.4% to $410,345 and condo sales basically flat (no increase) at $221,839.
Builders winning big this year: While statistics are not readily available, it seems that new construction is having a runaway success in 2017. The last number we saw reported had builder starts up 44% this year and at least one builder has reported a 100% increase in sales. Builders are also running out of inventory homes and we have seen numerous price increases and pull back on buyer incentives.
Beaverbrook: (MLS® zone 9001)
Residential unit sales up 26.5 % through July with average selling price up 8.1% to $448,469. The average house is selling in 1-2 weeks on the market, at slightly above listing prices.
Katimavik: (MLS® zone 9002)
Residential unit sales up 30.6% YTD with the average price up just 2% to $374,869.
Acute residential listing inventory shortage with less than a month of listing inventory currently on hand.
Typical sale is happening in 2-3 weeks on the market and selling at just below listing price.
Glencairn: (MLS® 9003)
Unit sales are up 18.3% with the average selling price up 6.2% to $312,878. Also acute listing inventory situation with less than one month’s anticipated sales available. Typical sale occurs in 2-3 weeks on the market.
Bridlewood: (MLS® 9004)
Residential unit sales up 4.9% and average selling price up 6.7% to $416,272, also experiencing acute listing inventory shortage. Typical sale occurs in 1-2 weeks on the market.
Kanata Lakes: (MLS® 9007)
Residential unit sales down 11.9% YTD with average selling price also slightly down to $487,882 (-1.0%) Listing inventory very limited, less than one month’s expected sales. Typical sale in 1-2 weeks on market and selling almost right at average listing price, if not above.
Morgan’s Grant: (MLS® 9008)
Unit sales down 15.8% with average selling price up 10.8% to $406,293
Very acute listing inventory shortages, further enhanced by limited new midrange construction in the immediate area. Also only 1-2 weeks on market to get a conditional sale.
Emerald Meadows/Trailwest: (MLS® 9010)
Unit sales have surged 29.9% through July 2017 (residential sales) and the average selling price is up 8.1% to $367,751. Very acute listing inventory shortage in this area! Also 1-2 weeks to achieve a conditional sale.
Note: to put the above in to perspective, overall residential unit sales have increased by 9% through July 2017 and the average selling price is up 6.9% to $426,365. Residential listing inventory at the end of August shows slightly more than 4 months of listing inventory available across the Board, with the average selling time in the 30-40 day range.
Summary: lots of multiple offers and sales above list price which makes things easier for most sellers but then the buying side is a whole lot tougher. Strong market should continue unless there is a larger than expected backlog created by those who bought new construction for future delivery start to feed their existing homes in to the market in large numbers.
With prices going up…what is your home worth in this market? Given that the price of your next home is probably going up faster than your current one, it might be a good idea to review your plans.
If you are thinking of a housing move, we would be happy to analyze and discuss your specific situation, assuming you are not already working with another Realtor.
We have some of the lowest fully supported MLS® listing rates in the city, especially for those who are both buying and selling with us. Give us a call at 416-435-4692 or check us out online at the co-ordinates below.
You’re kidding me right? We are not even at the end of August, yet “time may be running out”.
Well, think about it, there are only a few weeks of summer remaining (sorry!) with weather warm enough to do a lot of outdoor prep that you will not have time to do in the early spring, because of cold or damp weather. This is true for anyone who may be contemplating a sale anytime between November and May but especially so for military personnel that are expecting a “posting notice” out of Ottawa which means an April listing.
Here are some sample projects that will help you get ready for a spring sale now:
Any outdoor painting, caulking, staining, sealing, parging or other concrete repair
Repair or replace any tired fencing or decking.
Thin out, weed and mulch gardens and plant new spring bulbs for colour.
Trim hedges, shrubs and replace any plants, trees or sod affected by bugs or heat.
Aerate, top dress and overseed the lawn and fertilize, so it will look great next spring. Hire a professional lawn service company or landscaping company if your lawn and gardens are in really poor condition.
Hint: extra watering in the fall right up to the time the snow flies is a great way to have lawns, trees, shrubbery and gardens look good early in the spring.
Clean out the eavestroughs once all the leaves are down this fall.
Get the windows cleaned inside and out.
De-clutter garage, garden shed and remove any extraneous items or materials from outside spaces.
Replace any tired outdoor furniture or accessories.
Dig out your home inspection manual and see if there are any outstanding items on the list that have not been completed.
Hint: consider a pre-listing home inspection right now! This may uncover things that need to be addressed and it may save a sale later. Many inspection items are a lot less expensive to fix before listing than after. A general home inspection may also conclude that a roofer, HVAC, foundation, WETT or other household system may require professional servicing or further inspection. Better to find it now than later!
If there is a swimming pool, have it professionally closed and inspected this fall and keep copies of work orders, invoices and any repairs or quotes.
Get your driveway sealed, so it will look well maintained come spring.
You could also take some photos of the exterior of the house and yard, garden, shrubs, trees etc. right now, as they probably look better right now than any time until early May. Having some nice color photos to use for online in in home presentation during listings, is a great tool and allows prospective buyers to see the summer state of the exterior landscaping or other features.
This is by no means a complete list and you have not even started inside yet! If you would like to discuss what you need to do to be 100% “listing ready” for a spring or winter sale, by all means give us a call, if you are not already working with another Realtor.
We really do have a lot of excellent people in our profession and it is on behalf of all these quality sales people and brokers that we offer the following rant on what we feel are really poor real estate practices by some that should not reflect poorly upon us all!
The “snow in June” listing photos: C’mon guys!…how tough is it to pop by your listing and get a photo update? How is one serving the seller by telegraphing that the listing has been on the market for quite a while…sheesh!
The 1 photo or no photo listing: Do you think that this is going get people’s attention or that they will come back to check out the listing later?….keep dreamin’!
Too many listing photos: 6 photos of the front door or the bowl on the dining room table….who needs this? There are very few properties that cannot be effectively shown with 25-35 quality photos that show the layout with some perspective. Some artsy photographers get carried away but few consumers (and trust me, way fewer buyer agents) want to click through 100+ photos!)
The focus on something you’re not buying photos: How many listings do you see where the focus is the flower arrangement, the staging, the accent wall, the furniture, the artwork, the dining room table, the knick knacks, etc. Do I really need to see a close up of a vase in the middle of a table when I can’t see the room it’s in?
The (old) cellphone photo:
Some of the listing photos we see look like they were taken with an old flip phone. I guess it works for those going for the dark and fuzzy look…but it does nothing for the online viewer and even less for the seller. This works especially well (not!) with text that brags about the “bright, airy space with lots of natural light”.
The companion photo set is the one from the agent with the latest and most expensive phone but you can tell they took all the listing photos in about 2 minutes (while walking through the property-hence the blur), since they had to rush off and get the Beamer detailed, pick up their commission cheque or get to their mani-pedi, workout or yoga.
The missing photo scam: Do you really think that smart consumers won’t figure out the yard is ugly, there are hydro towers or an expressway in the backyard, the garage is falling down, the roof is doomed or that the Army Corps of Engineers are needed for kitchen and bathroom renos?
The super wide angle photo: …don’t you just love the ones where the fridge or stove looks 6-8 feet wide?
The “why-is-this-in-the-photo?” photos: Sometimes you just have to shake your head at the unusual things that catch your eye in listing photos. The pet, the diaper pail, the garbage can, the Realtor reflection in the shower door or mirror, the car in the driveway, dishes in the sink….anything that distracts the buyer from assessing the house for their needs is bad news.
The-too-many-too-few conundrum: Condo listings specialize in this awful practice: you get 3 photos of the unit and 12 of the view, the building complex, lobby, gym, pool, or neighbourhood/surrounding area. Sure you have a great park or bike path down the street but I want to see the darn place I may be buying!
The “why bother” photo set: Tenant occupied properties lead the way but are not the only source of incredibly messy, disorganized properties that are clearly not ready for prime time. To be honest, some are so scary; you hope you never have a customer call who might want to see one of these suckers! You are not doing yourself or the seller any favours by listing those in this condition…so why bother?
Shame on you for not investing in professional photos! Our industry in Ottawa is serviced by many excellent and reasonably priced photographers who do fantastic photography and hosting services at very reasonable rates. If you are listing someone’s property and asking them to pay $15,000-$20,000 (or more) in commissions and won’t shell out $150 to get some decent photos done? …sorry, you shouldn’t be in the business! Oh, and by the way…shame on your brokerage and manager, too!
The “I-forgot-what-the-point-was” photo spread: The objective of the exercise is to have the prospective buyer see enough of the key features of the property that they will want to come and see it in person and soon! The photos should highlight the critical features, be consistent with the text and be just enough to keep them wanting more. Too often, these simple objectives seem to be forgotten.
More of the same (and worse!) in the video world: All of the above issues and more are present in the now ever present video/Utube/social media marketing which is far from an exact science for the amateur productions too many turn out to be.
If we have forgotten any mind boggling real estate photo practices that you see regularly, please let us know!
We are having the best year since 2010 in Ottawa real estate, with unit sales and prices up nicely and listing inventories dropping significantly from some historical highs in 2015.
Overall unit sales are up 10.8% and average prices are up 7.2% to $398,872 across the Ottawa Real Estate Board (OREB)
Builders are reporting an extraordinarily strong year with one report indicating a 44% hike in unit starts and one builder reporting that sales have doubled in the first half of the year!
So how is Stittsville doing? Stittsville market is keeping pace with overall growth with the exception of areas north of Hazeldean Rd which is fairly flat in both sales growth and price increases.
Desperate need of more listing inventory north of Hazeldean Rd!
MLS® zone 8211
Unit sales are down 7.6% compared to midway in 2016 and average prices are pretty flat with an increase of .5% to $393,237.
Very limited listing inventory may be the cause of relatively fewer sales, for example, this area has only 22 total listings at time of writing and that is barely one month’s worth of sales! So this is a great time to be selling in Stittsville North (Fairwinds, Jackson Trails, Bryanston Gate, Timbermere, Poole Creek) especially.
One would have thought that this should push average prices higher but is not the case thus far. The other two Stittsville zones below have a more reasonable 3 months’ worth of listing inventory, although still much lower than in previous years.
Central Stittsville: (MLS® zone 8202 between Hazeldean Rd. and Abbott St.)
Unit sales are up 25.6% and average prices up 8.2% to $468,745. 55 residential properties currently listed.
South Stittsville: (MLS® zone 8203)
This area is also seeing strong results with unit sales up 21.7% and the average price up 5.8% to $512,666. 50 residential properties currently listed.
Builder competition: With so much new construction in Stittsville and Kanata, the resale market is always competing with builders. This can have an effect on those selling, particularly if the home is less than 5 years old and the builder still offers that particular model for sale.
Builders have been raising prices this year, along with the market overall.
Construction disruption: Some streets/neighbourhoods may have resale affected by new construction in adjoining parcels of land, particularly where that development may change the ambience or traffic patterns.
The military invasion continues! With the migration of DND HQ to DND Carling Campus at Moodie Dr., Stittsville and Kanata continue to be very popular for military families.
If you would like more information on this or any other neighbourhood and are not currently working with another Realtor by all means give us a call 613-435-4692 or check us out at our online co-ordinates below.
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.
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
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!