Toronto’s Buying Frenzy. Seven Ways to Rise Above and Master the Market
We’ve all heard horror stories about the current Toronto Real Estate Market: multiple offers from 20-30 or more competing buyers, bully offers, and homes selling for WAY over asking. It’s become the new standard. And it can be scary.
So what can you do when your efforts to buy a home,
or to find a home for your clients, feels like a horror film?
The secret is to think like a survivor. If there's one thing a horror movie franchise loves, it's a sequel. And any good sequel needs a survivor. So, with that in mind, welcome to our three part series about rising above the genre and slaying the market.
In every horror movie, there are lots of people who run around screaming and panicking. And this is true in the real estate market too. So many agents are doing NOTHING to ease their buyer clients’ fears. These agents are saying the market is CRAZY, it’s UNBELIEVABLE, IMPOSSIBLE to get an offer accepted, there’s no inventory and it’s hopeless.
But that’s victim mentality.
In real estate, as in the movies, the character who runs around in a screaming panic won’t be around long.
If you want to survive, you have to be calm. Very calm.
But calm isn’t the final answer… it’s just the starting point. Smart and savvy agents will always thrive and get the best for their clients, no matter what the market is doing. And, in the movies, smart and savvy characters have a better chance of being around past the final credits.
So, with that in mind, here are some rules to help you be a survivor in the current market.
1. Look beyond price
Making top dollar is a huge motivator for sellers. But it’s not the only factor. Thinking about only 'the dollar' ignores the fact that sellers need to move somewhere when they sell and might have their own timelines in mind. The ‘dollars only’ mentality also ignores the fact that selling a home can be an emotional process, and the thought of selling a home to a person with whom they connect or empathize could be a factor in accepting an offer.
At the end of the day, money isn’t the only factor at play in home sales.
Andrew Ipekian, of the Andrew Ipekian Realty Group, talks about multiple offer scenarios as a great chance to get to know the selling agent. And to find out what the sellers are looking for. He asks ‘What else is important to your client, beyond price? Is it conditions; is it closing date; is it deposit cheque; is it a story about your client… is there anything else I can do with my offer, other than just price?' Always ask that client, when you present that offer, ‘what else is important?’
2. Know your numbers. Educate the clients… and the agents
Jimmy Simmonds, Real Estate Agent, says the market is changing. In the past, you could have ‘…looked at the last exact floor plan from the same, or similar building, and use that as your comparable.’ But, he says, that isn’t the way things work anymore.
Now, he takes a more ‘mathematical approach.’ His current approach is to ‘look at a unit which had sold recently and looked at the price per square foot. He says, about his last sale, ’I was writing emails, as the listing agent, to send out the buyers’ agents to send to their clients so they could see where we wanted to be on the price point.’ He says ‘That way, they didn’t have to think of a number or reason. I’d given it to them on a silver platter.’ This makes sense.
If you know the numbers, the market is less likely to surprise you.
You could go red in the face talking about how the growth is ‘unprecented’ or ‘unfair,’ but at the end of the day, this is the way things look in our current Real Estate landscape, and the more you know about recent current sales, comparables, price per square foot, and seasonal trends, the more you’ll be able to remain calm in the face of the competition… and maybe even win an offer.
And that’s part one. Check out part two of our SEVEN WAYS series… in just a few days.