Connect with us

Real Estate

Bidding wars: Big bad bully | REM





“Competition brings out the best in products and the worst in people.” – David Sarnoff

In this third and final segment on the hot subject of bidding wars, I draw some conclusions that lead to more questions. But consider that before we have the answers, we must ask the questions.

During my career, I orchestrated many multiple offer scenarios for my sellers. In earlier days, board rules permitted us to delay the showing commencement date as well as offers. I’d organize showings to begin – and offers to be presented – on the same day, usually a Saturday. On that first day, the property was usually a buzzing beehive of activity, with appointments scheduled every half hour, sometimes overlapping. Aside from the first and last showings of the day, the lockbox usually remained untouched, with business cards being exchanged between agents arriving and departing.

I also occasionally threw a public open house into the mix. Typically, during the presentation that same evening, the street was clogged with cars, anxious agents and lingering buyers, all caught up in the competitive frenzy. Even back then, though, some agent would seek to sneak in early with an offer conditional on satisfactory buyer inspection. Thankfully, my vendors normally adhered to the plan and rebuffed them. And did those overtly aggressive agents show up at offer time? Always.  I don’t recall ever losing one.

Ignoring your carefully formulated plans, with the deliberate intent to avoid a competition, an aggressive buyer agent may contact you to register on your new listing what has become known as a “bully offer”. They demand an appointment prior to the officially announced presentation date. Since you’re convinced of the merits of your marketing strategy, you encourage your seller to make this insistent agent wait.

A seller certainly has the right to refuse to see this “short-circuit” offer, but curiosity sometimes gets the best of them. It’s mystifying why they’d sacrifice an opportunity for multiple showings and offers by surrendering to a bully’s attempt to evade a fair competition. Obviously, you must comply with your principle’s instruction. However, before committing to an earlier date and all that entails, ask the buyer agent about the offer. If the major terms are unacceptable, advise your seller to stick to the original plan. But if it’s full asking price or more, with no conditions, they may not gamble losing it.

In accordance with industry rules – and prior to viewing the bully offer – the MLS listing must immediately be amended with the new presentation date and time. Plus all agents who have already shown the property, have confirmed but outstanding appointments or have expressed interest, must be promptly informed of the new arrangements. If they haven’t already done so, all buyer candidates must quickly scramble to view the property and register their offers. Unfortunately, some may be unable to act swiftly enough. So, your seller might lose them. By caving to a bully’s demand, they’ll never know if that lost buyer might have been The One.

Given such short notice, the buyers who weren’t able to act in time are grievously disappointed and sometimes very angry with our industry and its members. It could be argued that your seller was formally tendering for competitive bids, but at the last moment, chose to dishonour their commitment to await all comers. What can a disappointed buyer do about it? Well, it’s been opined that an aggrieved buyer could sue the seller and their agent for damages. I’m unaware of any precedent-setting court case to date, but it could happen anytime. All it will take is a sufficiently disturbed buyer with deep pockets. Listing agents beware.

Does greed get the best of people? Yes, I suppose it sometimes does. Some argue that buyers who dodge the rules of fair play for their own advantage are indeed avaricious and iniquitous. Is a bully buyer innocent? Do they have the right to be aggressive? Obviously, the technical answer is yes, for they certainly have the right to buy at the lowest possible price. The same argument could be made for an aggressive seller who wants the highest price possible. But if a bully buyer deliberately ignores a seller’s clearly stated procedural request regarding the marketing of their own property and attempts to circumvent the system, are they behaving morally? I suggest that they’re demonstrating a complete lack of respect for not only the seller’s wishes, but potentially our rules of service. In my view, this is not representative of innocence. Bully buyers are no different from movie patrons who butt into line ahead of other people patiently waiting their turn.

It’s also been said that sellers could refuse to comply with a bully’s demand, that those who agree to this marketing strategy are also selfish and greedy and knowingly contribute to the inflation of market values, not to mention a highly stressful and potentially devastating experience for many buyers.

Some have suggested that sellers can be bullies too. However, they’re certainly entitled to attempt to maximize the sale price of their own property by any available legal means. And by agreeing to a viewing period and delayed offer presentation day, are they not being fair by providing all interested buyers an opportunity to make a bid?

Further, is it not a major responsibility for a listing representative to do everything legally and ethically possible to get the best terms for their seller client? The strategy is designed to stimulate fair competition, which should result in a fair sale price based on supply and demand in a free democratic society.

Is the bully offer system undermining consumer confidence? Absolutely, especially with buyers willing to respectfully comply with the posted protocol but who are caught with their pants down by a bully jumping the queue. Nevertheless, until the rules change yet again, fair buyers must be prepared to respond to bully offer scenarios by viewing the property at the earliest opportunity.

As their representative, you should have your buyer’s offer documents prepared in advance and ready for presentation on short notice. To contribute to consumer confidence in our industry, listing agents who practice this legitimate hot-market strategy, which is more prevalent for city or suburban than rural, should carefully prepare their new seller for the distinct possibility of a bully offer. Ask your seller to adhere to the plan or risk trouble for both you and them. The reputation of our industry is at stake.

“When a resolute young fellow steps up to the great bully, the world, and takes him boldly by the beard, he is often surprised to find it comes off in his hand, and that it was only tied on to scare away the timid adventurers.” – Ralph Waldo Emerson


Source link

قالب وردپرس

Real Estate

7 Tips For First-Time Home Buyers In Calgary





Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

Continue Reading

Real Estate

‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market





The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

Continue Reading

Real Estate

10 Tips For First-Time Home Buyers





Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

Continue Reading