Take a walk in the trenches with me

The past week has felt like two, with all of the multiple offers happening throughout the city. We are in the midst of a real estate pandemic in that some buyers on some properties, are being crazy stupid with the money they are offering up. Old news! Maybe?

This past Monday would have been an offer night for a set of first-time buyer clients, whom I absolutely adore, on a renovated bungalow home in North York. We viewed the house late the previous week and after spending a good amount of time viewing the home both inside and out, my clients were excited in their thinking…this could be the one!

It checked off many of the boxes we hadn’t been seeing in our search of late, and although there were some things that were missing, I matter-of-factly reminded them that most first-time buyers rarely find “everything” on our list in the same property. If our “must haves” are met, and if one or two of our “nice-to-haves” are not, then it might be worth considering moving forward with a conversation on value and putting forth an offer.

We went our separate ways with my promise to email them some recent area comparable sold properties within the next day or so as well as my opinion on a range of value in what I thought the home would be worth.

With my analysis complete I wrote to inform them that although the house is listed at $998,000, I would place a value of $1.1 million, give or take. There were a few very good, recent comparable homes that had sold, and based on my knowledge and experience, this would be a reasonable range to use as our base. Now we had to decide, “how much did we really want it?”

After some careful review by my clients, along with some discussion around strategy, they decided that they were going to pass on the house and we would continue our search. I was relieved, as in my head I had felt it would sell outside of our range and sometimes multiple offers can be emotional, and decisions are made in the heat of the moment (or battle to some) that result in less than favourable terms for an anxious buyer. Although my clients are prepped well in advance on how to best navigate the emotional rollercoaster of a multiple offer scenario, occasionally a curve ball is thrown my way, that could result in us buying the home, in less than favourable conditions. 

So, offer day comes and there are two offers registered. Probably two short of what I thought there would be, but I’m not completely surprised as the selling agent opted to forego carrying out a pre-home inspection (instead choosing to tell me “it’s such a great house that his clients insisted that one was not needed”!) and I’m feeling this might have scared away a buyer or two. It was a factor for us, and although we could have easily arranged our own inspection in advance, it was another “X” alongside some other questions about the home.

The house ended up selling for $1.2 million, which would not only have been out of my buyer’s comfort zone, but really just not worth anywhere near that much money to them. I had to agree. When I informed them of the sale price their response of “We were shocked!” brings me back to my opening, that some buyers are offering up crazy stupid money in some pockets of the city.  

Putting an exact value on a piece of property is impossible, although narrowing it down to a small range isn’t. Values can be subjective to factors that vary from one buyer to the next. But this is the environment the real estate market currently is in. I really hope the next few weeks are more favourable for my buyer clients. 

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