Bring The Offer - Part 1 - Buyers
We are going to touch on 3 touchy subjects in this blog… 1) What kind of market we are having 2) You should submit that offer, put it on paper! 3) There are places in the Guelph area under 400k First...what kind of market are we having….. Oh man, I am going to say it...it’s going to sound salesie….but here it is…. 2019 has been a BUYER’S MARKET. Glad I am getting this off my chest. In Guelph there is always a supply and demand problem, the demand to move and live here has always been there, but now that the prices in Guelph are creeping higher that demand is becoming fickle. In my experience, no matter what city, Buyers are bound to 3 things: a) What the bank says they are approved for b) What their budget/lifestyle says they can afford c) How far do they want to drive to work every day There are other factors too, but these ones are the majors and in my experience, it usually comes down to these. With the GTA market prices not too far ahead of us, I have experienced this year the question from GTA buyers “why would I buy this for X and commute when I can stay in Mississauga and not commute?” first time, very first time I have heard that was this year. Among the cool off with the CHMA Rules, Bank Of Canada interest rate changes, we are now posed with the question of what the value of the homes in Guelph are when life here is becoming more and more GTA like. I don’t like that, I grew up here in Guelph and I tend to stick to Old Guelph to keep the magic alive, but I would be silly to ignore the changes happening in my hometown. 2016 we saw the pricing of houses to be a challenge because of the influx in buyers wanting out of the GTA, 70k over asking price was not unheard of. 2019 we are seeing the opposite market. It is complicated to nail down that list price because the motives of the Buyer have changed. This benefits the Buyers, stay with me. As we have more sales happening the Seller’s mentalities are still at this higher value, the Buyers are adjusting this slowly every day with Buyers bringing offers sightly under asking, so we see it in roughly 5-10k adjustments in the final sale price. This is a sign like any open market that the values are adjusting. 5-10k now 10-20k soon then likely to 25k-35k in near future...that is likely when buyers start to catch on telling their friends that “I got the house for 30k under asking!!” and then I run into the friend at an open house and they adjust to being happy at 20k under asking...and the cycle continues until we are in a more balanced market. Brings me to point 2...Bring The Offer…..this fall and I believe into the Spring we are going to see this price adjustment. Find the house you love, look slightly above your price range and BRING THE OFFER!! I am talking about negotiable numbers, especially if it is the house you love, proceed with caution there. If it is the house that will suit your family or your investment, grab every sale comparable you can and put the offer on paper with justification. There are so many other factors that can make a connection for a Seller….closing date, conditions, deposit….it doesn’t always have to be the price, the Seller isn’t always right on it either. No hard feelings about it, but we don’t always have to accept the price tag. Now is the time, as the market does this price adjustment it is time to take advantage of it. Yeah, the Seller will have to wrap their minds around the price, but a good listing agent will likely have had the conversation with them about it, they would have used the same comparables. Even better likely the house sits and prices around it drop, and the Seller will have to see the light. Don’t worry about offending, this is business and armed with Comparable Sales, you will be in good shape. On a sperate point. A conversation that comes across my table is “You can not find anything in Guelph under 400k any more”. You can, that’s not true at all. Depends on what you are looking for...no you can not buy a Red Brick Century Home under 400k nor many detached homes for that matter that don’t need major repair. If you are looking to start out with a townhouse or a sizeable apartment West of Downtown or Stone Road West? We can find it. Yes, you will likely be paying condo fees, use it as your motivation to build some equity and get out of there or it could make a great rental in the future. Making the choice to look at your want to have’s and need to have’s list. Prioritising your investment isn’t always full of easy choices. You may go from renting a 2 bedroom apartment to owning one and paying slightly more in a mortgage….but you own it, and every payment is an investment in yourself. Buyers are seeing their day in 2019 and I think in 2020 too...we haven’t even touched on the influx of New Builds and how that affects the Buyer’s options….I do touch on it in my Part 2 of this blogs speaking to the Seller in this market. Even if you are not selling...it will be worth a read.