How Do Sellers Review Multiple Offers In Calgary?
The Calgary real estate market is on fire right now and pretty much every listing that is somewhat priced well is receiving multiple offers. My latest listing received 17 offers and sold for close to $75,000 more than the list price. It can be a frustrating time for buyers, but there are some things you can do to improve your chances of securing the home home. Check out my youtube video for all of the information and a condensed written version below. Price - Sometimes the decision is really easy for the seller when someone is simply offering too much for the home. For example, my latest listing was listed for $525,000 and sold for $595,000. There's not much you can do about this. Closing Date - A good practice is to call the listing agent and ask what the seller would like for the possession date. Make it easy for the seller to accept your offer. For example, my latest listing had a basement tenant and some people were submitting offers with possession dates that would make it difficult for the tenant such as mid month etc. We ended up accepting an offer where the buyer took on the tenant and gave us flexible possession. Deposit - A higher deposit shows your strength as a buyer. A higher deposit improves your chances when competing against similar offers with lower deposits. Try to get the deposit in the same day as the offer is accepted if possible. Conditions -When in a multiple offer situation conditions can be a deal breaker. For example, my latest listing had a conditional offer at $601,000 but we actually took an unconditional offer at $595,000 because there's more certainty. Try to have your financing together, a pre approval letter, staggered conditions dates like a quick home inpsection condition, but a longer financing condition. Escalation clause - Our offer will be $1000 more than the highest bidder, our offer will be $1000 higher than the highest bidder up to $570,000 etc. Have they viewed the home in person - Some buyers haven't viewed the home in person and deals like this can fall apart when they view the home in person. Best to view in person if possible. Terms: Don't go overboard with terms when in a competing offer situation. For example, my latest listing received 17 offers and some people had terms such as the buyer's lawyer looking at the land survey, junk removal, professional cleaning, tenancy forms, etc. These are all ok in a balanced market but when competing against 16 other buyers you have to make it easy for the seller to take your offer. Communication - The buyer's agent can make the deal easier to accept by being punctual and a good communicator. There's nothing worse than working on a transaction and the other realtor goes missing. This can cost a buyer a transaction!
Why You Shouldn't Sell A home As A For Sale By Owner In Calgary
Are you thinking of selling your home and taking advantage of the current Red Hot market conditions we have here in Calgary? Maybe you're thinking of selling it as a for sale by owner a fsbo and saving on the real estate commissions... it definitely sounds like a tempting idea. In this video I'll explain why it might be a bad idea and why it might cost you a lot of time and money! Below is a brief summary of the topics I'll cover in this video. Check out my youtube channel for a complete list of all reasons you might want to consider selling as a for sale by owner. Lack of Exposure: FSBO listings may not receive adequate exposure compared to listings managed by realtors, resulting in fewer potential buyers. Types of Buyers: FSBO properties may attract less desirable buyers, including those seeking significant discounts or unable to secure financing, leading to lower sale prices. Sales and Negotiation Skills: Selling a home requires experience in sales, negotiation, pricing, and understanding market dynamics, which many homeowners lack. Legal Complexities: FSBO sellers may encounter legal issues due to unfamiliarity with paperwork, disclosures, and potential liabilities, increasing the risk for both buyers and sellers. Time and Effort: Selling FSBO often takes longer and requires significant effort, including maintaining the property for showings and accommodating potential buyers' schedules, leading to decreased sale prices and prolonged market exposure.
Is It a Buyer's or a Seller's Market in Calgary?
Is it a buyer’s market or a seller’s market in Calgary right now? What exactly does that mean? I get asked the question all the time if Calgary is in a housing bubble and are prices going to keep going up or drop soon? Buyers are getting worried if they should just jump in now or wait, and for sellers - should they cash out now or let it ride. What’s the right answer? In this video I’ll let you know! So first things first, what exactly is a buyer’s or a seller’s market? Buyer’s market - A buyer’s market occurs when there are more homes available for sale than there are buyers actively seeking those properties. Simple supply and demand. Sellers will have to compete to attract those buyers and you will see a large number of homes on the market, more expired listings, falling prices, seller concessions and favourable buyer terms. Seller’s market - A seller’s market occurs when there are more buyers looking for homes than there are homes available for sale. Sellers have the advantage here and more negotiation power, and enjoy quick sales, multiple offers, unconditional offers, offers over list price, high prices, limited terms and conditions, etc. So the answer to the title question is that Calgary has enjoyed a strong seller’s market for the past 3 years. It is expected that prices will grow and inventory will remain tight, but probably not as tight as in 2023. There are some things that could affect this such as interest rates, immigration, our oil and gas market, a federal election, so there’s a bunch of variables but I’d still bet on Calgary having a decent real estate market going into the near future. Buying A Home I’ll start off with the buying side and let you know my thoughts on what’s going on right now and how to secure a home in this type of market. Right now I’m getting a lot of questions from buyers asking if we are in a bubble and if the prices are going to drop. I’m also getting buyers who tell me they are waiting for interest rates to drop before making a move. I’ll start with that one. I’m coming across so many potential buyers waiting on the sidelines for the interest rates to drop. I think this is a mistake if I’m being 100% honest. The interest rates were only that low because of the extreme overreaction to covid. It was an abnormal situation and I wouldn’t expect on that happening again any time in the near future. I also don’t think inflation is anywhere near controlled yet and if they drop the rates inflation will probably take off even more which nobody really wants, this is why they just agreed to keep the rates the same. From a Calgary only perspective I actually think they should raise the rates because our market is currently out of control, so I wouldn’t expect the rates to plummet any time soon. If they drop the rates our market will really take off more than what it currently is and you can expect even more difficult seller’s market conditions, so as a buyer it will be tough to time that situation correctly. The main reason I think this is problematic is because our prices are going up in Calgary quite significantly. Is it better for you as a buyer to purchase a home at $600,000 at 5.6% on a 25 year term with a payment of $3700, or is it better to purchase a home at $700,000 at 4% on a 25 year term with a payment of $3700. As you can see waiting doesn’t accomplish too much in this environment. I’m also not exaggerating and we have seen crazy price increases in the Calgary area so this is a legit scenario. There’s only 700 or so single family homes for sale in Calgary, the lowest since 2006 when prices skyrocketed in Calgary, so I wound’t be overly confident about waiting to buy a home. Here are some things you can do as a buyer to secure a home. Pre approval - get a pre approval letter so you can send to the seller so that they know you are serious. In a hardcore seller’s market many deals fall apart because a lot of buyers are frantically trying to secure a home, sometimes they offer more than they can handle, they get cold feet offering so much etc. A pre approval letter shows you are serious. Make sure you have a full pre approval where they actually pull your credit. Have your notice of assessment and tax documents ready. Use a mortgage broker vs the bank and ask the broker how many days they need to secure a firm approval. Work with one realtor and don’t go house to house with the listing agent. They represent the seller not your interests. Commit to one realtor and it should make the process smoother. Be flexible - Understand that half of the homes you see on the MLS are actually gone. I just sold one and the buyer sent me about 15 MLS listings and we could only view about 4 of them as the rest were conditionally sold or firm sold pending the deposit. Expand the area, location, type, price range etc. Act quickly - easier said than done as many sellers are delaying offer presentations to intentionally put people into bidding wars. There are some inexperienced realtors and sellers who might not do this. There’s a fine line with this. This can backfire with overpriced listings or the timing of it. Put your best foot forward when competing but don’t get attached to the outcome. (short condition timelines, pre approval letter, a high enough price you are ok paying, but not too high where you are angry with it), escalation clauses can help, and expect there to be multiple offers. Stay patient - I’ve had a buyer lose out around 15 times before finally securing a townhouse. Sometimes you just have to keep plugging away despite losing out. Beware of new listings though as they have the most interest. View, offer, lose out, over and over again and it’s the worst. Don’t blame the realtor as many people are fighting for limited supply of homes. We offered full list price in December and it sold for $100,000 over list and the home was just ok. People do foolish things when competing and regret it when the market normalizes. Consider looking at expired or terminated listings for additional inventory. Consider a lower priced home and assume it’ll be pushed up into your range with competing offers. Waiting - The spring market is the busiest time of the year in terms of sales and summer is the busiest time for possessions. If you can buy outside of the spring it’s way easier in a seller’s market as there are less competing offers. Sellers In terms of selling your home, you couldn’t pick a better time to make the move if you’re just looking at in terms of days on the market, pricing, conditions, etc. It wouldn’t take long and you’d probably get a great price. The question is, should you sell now or wait? I find there’s a lot of people who want to sell right now but there’s some hesitation to sell because people are worried about finding or competing for the next home. Selling won’t be the problem but buying definitely won’t be as easy. It takes awhile for things to play out in real estate and supply growth won’t happen overnight, so I don’t see waiting to be too much of a problem if you’re thinking of selling. I imagine the tight conditions will last until the summer but this is like trying to predict the stock market. I do come across a lot sellers who want to sell because they don’t want to renew their mortgages at much higher rates, and you’d think this would help balance the market, but any increase in listings has been met with a surge of pent up buyer demand. Like I mentioned earlier issues like immigration and migration, oil prices, interest rates, and politics could have an impact on our market so that’s what I’d be keeping an eye on if you’re trying to pick the best timing to sell. It is like the stock market though so when it becomes very evident when you should sell it might be too late. Here are some things to consider if you want to fully take advantage of the current seller’s market. Pricing Strategy - To accurately price your home you want to analyze what has sold recently that is similar to your home. Similar style of home, size, beds, baths, age, garage, basement, upgrades, etc. I must emphasize you want the sold prices not so much the active listing prices. A lot of people mistakenly price based on a neighbours home that isn’t comparable and is overpriced. You do want to know how many active listings you’re competing against though. Pricing correctly in this type of market can result in huge sales prices and competing offers so this is super important. Not a time to list high to leave room for negotiation. Price it well and take advantage of the market. Staging Tips - Prep your home, declutter, nice curb appeal, paint goes a long way, no smells, don’t be home for showings - go away for three days. Marketing Techniques - Price solves every issue in real estate, professional photos, iguide, list on a Thursday and leave the home until Monday. Allow every showing automatically, and look at offers on the Monday. Make a video for YouTube, shorts for instagram and Tiktok, google ads, facebook ads. Negotiation - I never see this happen but this is what I’d do. Do a home inspection and upload the document to the mls documents section. Give it to all the buyers and tell them to contact the inspector with any questions. Allow them to be at ease so they can put their best foot forward during the negotiation process. They will offer more if they aren’t as worried about possible home inspection items. This allows more potential unconditional offers. If someone sends you a bully offer don’t accept it unless it’s conditional and the deposit is received the same day. Other things you can do is have the Real Property Report ready in advance, have all the condo documents ready, inspect the title, let the buyers know specifically what possession day you want - to the day, no evenings or weekends. And again be out of the house for a few days to allow every single buyer to come in, doesn’t matter if there are multiple buyers in at once which actually creates a bit of a frenzied mindset as well which helps. Sometimes you have to slow the buyers down because they are frantically trying to secure a home. Many deals fall apart in this market after a few days because the buyer stops to think about it, they might have had to offer more than their approval limit to get the home, they are not pre approved and it just falls apart, etc. Ask for a pre approval letter. Delay presentation date for a few days - beware this can backfire as well. They could have offered on multiple properties at once and then start sending non waivers to the runners up. Have they seen the home? - 2 identical offers and one hasn’t seen the home I’d go with the the one who has seen it. For those who want to sell but can’t find something to move into consider a short term rental or airbnb while you’re searching for a home. Not ideal but it is a legit solution.
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