We often encounter a large number of buyers who will not list their homes until they find one to purchase. This creates a “catch-22” situation of sellers not listing their home, adding to the shortage of homes to buy. Everyone has an opinion of where the market is going, so we’re going to address the 5 most common misconceptions we hear.
1. Waiting for spring market
Buyer: “I’m going to wait until the spring when more homes come on the market.”
This is the common perception, but there are some years where this expectation doesn’t come to pass. There is never a guarantee that there will be more listings available in the spring.
WRG advice: If you’re currently the market for a home, don’t stop looking over the winter months. More buyers come into the market in the spring and this will create more competition for homes. You only need one good opportunity to find a great deal and that may just come along on the snowiest, coldest day of the year! Don’t limit yourselves to spring markets. They are unpredictable.
Book a buyer’s meeting with our experts here to plan a strategic home buying process.
2. Waiting for prices to drop
Buyer: “I’m going to wait for prices to ease.”
If we had a nickel for every time we’ve heard this! Some people think prices have got to give and they’ll suddenly go down. First, if this happens, the price you get for your home will also go down. That’s how markets work, so it’s all relative.
Second, when is this “easing” going to happen? It’s going to take some rather notable events to slow this train down, like interest rates increasing, supply increasing to meet demand, demand decreasing to meet supply, economic downturns or any other number of catastrophic events. These are impossible to predict.
WGR advice: Take advantage of the market conditions while you’re currently house-hunting. Don’t wait for some hypothetical situation that may never occur.
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3. You’ll always sell above asking in a short time
Seller: “I’ll have numerous multiple offers and sell $100K above asking in 3 days.”
We hate to burst any bubbles but even in a frenzied market certain principles still apply, like:
- how the home is priced at the outset
- location
- condition of the home
- negotiating skills of the agent
- closing dates
- special conditions
- etc.
WRG advice: Keep your head on straight, work hard to present your home beautifully, do the necessary fix-ups, make it easy to accommodate showings and don’t put up barriers to getting the home sold. If you haven’t done on-going maintenance, buyers are going to be quick to pick up on the deficiencies. Buyers want turn-key homes and yes, they’re willing to pay for it—but make sure you home fits the bill.
Book a seller’s meeting here to plan a smart strategy for your unique listing.
4. Deposits are always refundable
Buyers: “I can get my deposit back.”
There’s much confusion about deposit money; the money you put forward with the offer that gets applied to the purchase price on closing. If you back out of the deal during the conditional period, it’s likely your deposit will be refunded as the condition in the offer states. But, know this can be contested by the seller, so don’t assume it’s entirely automatic.
Also, with a firm deal where they are no conditions in the offer, or where the conditions have been waived, the deposit will not be refunded to you if you back away or breach the contract. The deposit will sit in the brokerage’s trust account until direction is given by the seller or the courts (if lawyers become involved). If the seller has suffered a loss due to your breach of contract, the courts will likely award damages, in the form of the deposit, to the seller.
WRG advice: Don’t make any permanent financial decisions contingent on receiving your deposit back.
Discover our hands-on approach to buying here that protects and empowers you.
5. The market is always in sellers’ favour.
Sellers: “I can sell high but I want to buy low.”
Prices are up right across the country. Especially if you’re selling and buying in the GTA and the surrounding region. Sellers have been shocked at how much homes cost, once they’re on the buying side. It’s so drastic that it’s one of the contributing factors to sellers not listing their homes.
WGR advice: You need to maintain realistic expectations about the market you’re entering. Working with a knowledgeable, experienced real estate team will help manage your expectations and ensure you are able to make the best of whatever market you’re in.
5. Realtors drive the market
Buyers: “Realtors are the cause of high home prices.”
Can we debunk this once and for all? The realtor and seller, in conjunction, will set a list price that hopefully serves the sellers best interests, but the buyer always sets the sale price. No one else but the buyer can do this.
That sale price can be higher or lower than the list price. When there is a strong buyer demand, or sellers/realtors set list prices far below market values to encourage more offers, this can create a market with astronomically high prices compared to historic standards. So when multiple people bid on a property, the highest offer is going to set the price.
If you’d like some honest, transparent information about the current market, call or email us for advice you can trust.
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