4 Critical Factors Today's Buyers Need to Know | Issue 194 Guelph Weekly Sales Report
4 Critical Factors Today's Buyers Need to Know
It’s no secret that the Guelph real estate market is a strong seller’s market right now. Buyers have been struggling to find homes and, more times than not, when they find a great home they have to compete with other buyers to get that home.
What most buyers don’t recognize is that if they are putting offers in on homes and are not well prepared to compete, they are actually contributing to the sharp rise in prices.
We’ve talked about this process in past issues, where a new home comes on the market, the seller’s strategy is to wait a few days and set a date for offers to be reviewed. It allows time for buyers to see the house and time for the feeding frenzy to establish itself.
At offer presentations, each buyer is told they are competing with X number of offers, be it one other potential buyer, or 30 total offers. They are told to bring their best offer to the table, because there likely won’t be any negotiating. What the buyers don’t know is what they are competing with.
REALTORS® in Ontario are governed by a number of laws and regulations. One of those is that we are obligated to present any and all offers and to follow our client’s instructions. So, if we are working with a buyer and they want to place an offer on a property, we’ll prepare the necessary documents, do the research on value, advise our clients on a strategy to get the offer accepted, and how to compete when faced with multiple offers on the same property. The challenge is when a client wants to submit an offer that is full of conditions and below list price, and they are in competition for the property. Sellers love these unprepared buyers showing up to offer presentations. While their offer will never be considered, the other buyers don’t know the details of what they are competing with. One of the sure-fire ways to win in competition is to add more money to the offer.
Realtors representing the unprepared buyers should counsel their clients that their offer won’t stand a chance, and that they are only helping the seller’s out. However, if a client wants to proceed, we are obligated to act.
So how to avoid this? There are four critical factors that buyers should be considering as they navigate our present market.
Buyers need to get their financial house in order prior to looking and falling in love with a home. Get connected with a great mortgage broker or mortgage specialist. You need to understand exactly how much you can afford, and more importantly, qualify for.
EDUCATION & KNOWLEDGE
Your REALTOR® will take the time to educate you on current market conditions and help you understand where home values are today. It’s one thing to look at homes that are on the market, but it’s critical that you understand where they will likely sell. The benefits of a deep understanding of where the market is currently and likely headed, along with neighbourhood details, will help you make better decisions and know when to offer and when to wait. You’ll potentially save thousands of dollars!
We get it. Today is all about instant gratification. Social media and real estate reality TV bombard us with how in 30 minutes we can take a wreck of a home and turn it into a dream! Don’t get caught up in buying beyond your means, or buying more than you need. This market is at an all time high, and at some point there will be a correction. Don’t get caught in a market backtracking. Your REALTOR® will advise on which homes will weather any economic storm the best, and how to unlock hidden value.
It’s easy to get caught up in the hype and excitement of buying a home. This is one of the biggest, and in most cases, the most emotional purchase you’ll ever make. Don’t put all your hopes and expectations into getting “that” home. A professional REALTOR® is an advisor and advocate for you. They’ve been to many an offer presentation and know what it takes to win the right home for you. Once you have the other three factors described above dialed in, you’ll know when to pull the trigger!
THIS WEEK IN THE GUELPH REAL ESTATE MARKET:
76 homes were sold this past week. This week’s sales are 162% higher than the same week last year. I’ll let that sink in for a bit...
52 out of 76 homes sold, 71%, sold at or above list price. Incredible for this time of year!
The median home in Guelph was a 3 bed, 2 bath home that was 1,423 square feet. That home sold for $580,750 ($383.19/sqft) and took a mere 10 days to sell. Sellers were of course getting 100% of their original list price.
Compared to this year, the same week in 2019 was in a coma. 29 homes were reported sold, 34.5% of those homes (10) sold at or above list price. The median home was slightly larger, at 1,558 sqft and sold for $585,000 ($364.04/sqft) and took 14 days to sell. Sellers were able to negotiate a sales price of 98.91% of their original list price.
Looking forward, March hopefully will bring a large increase in the number of homes for sale, as this current pace is not sustainable. This kind of activity, while incredibly exciting, will ultimately result in a more drastic pullback at some point. We’ll be watching these conditions closely. Stay tuned.
P.S. In case you missed it, we posted a couple of great blog posts this past week with great information for buyers and sellers. Read it below:
GET EXCLUSIVE ACCESS TO LISTINGS BEFORE THEY HIT THE MARKET
Don't miss out on your dream home because someone else saw it first