Bidding Wars

by Darrin DeRoches August 21 - 27, 2014

All of a sudden there seems to be an epidemic of hold back offers in Hamilton. A hold back offer is when the sellers decide that they will not look at any offers until a certain date. They want the market to have a week or so to look at the property and then, on a certain date, send in offers. The real intention is to create a “bidding war” which makes buyers compete against each other. This works in some cases but it seems to backfire more often than not.     I have several clients that will not even look at properties if there is a hold back date. They do not want to be “duped” into a false sense of urgency and over pay for a property. These hold back dates are causing more harm to a property than good. It also gives clients a week to change their minds — over and over again.     I showed a great little cottage in the west end and we left feeling pretty good about the property but had four days until offers accepted. The night before it was time to make offers, my clients decided not to write an offer. They fell out of love with the property and if we could have made an offer the first day, I am sure we would have closed. The property hit all the boxes on their wish list but when you have time to think about it, you think “there might be better coming out”. I checked today on the property and it is still on the market. I guess all of the other buyers felt the same way.     On the other side of the spectrum, I see good agents putting up properties that sell within days for top dollar and everyone wins. The agent makes a quick sale. The sellers get it sold without weeks of showings and disruptions. The buyers are excited and pay the market value. Everyone wins. If you really think about it, are you selling a property or are you squeezing out every penny you can? A good agent will negotiate the best price with one buyer instead of multiple offers that may or may not close the deal.     The hold back does bear fruit in some instances but lately I have seen more failures than successes and agents are over using a tactic that can hurt a property’s sale and make them sit on the market and go stale. This time of the year is usually pretty slow for real estate, as everyone is on vacation and getting ready to go back to school. Often you can find a good property while everyone is too busy, and I have seen a listing that would work great for my clients, but then I saw a hold back. These properties should wait a couple of weeks for the market to pick back up and then it would work. We are going to wait to pass the date and then see if it is still on the market and scoop it up for a better price. Timing can be everything! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca

Competing In Today's Market

by Darrin DeRoches August 7 - 13, 2014

If you want to sell your home for top dollar, you have to understand your market. Just because you hear the media saying it is a sellers’ market and Hamilton is having a boom in real estate does not mean your house will sell fast for top dollar. You have to understand your competition and beat them!     I recently did a home evaluation in the central part of Hamilton and once we did the walk through we discussed the renovations and possible price. The house needed paint and touch ups throughout and the seller was already doing the work. We discussed how they were going to finish the bathroom which was already under renovations. The final point was the kitchen which was in need of repair. The homeowner was going to try to match more recent renovations and do the paint, update hardware and simply “put lipstick on a pig”.     We sat down and looked at the comparables and came up with a price and a game plan. Some agents would have the sellers paint the entire home and put thousands of dollars into renovations when a simple cleaning and minor update would sell the property. This particular property had several homes for sale in the neighbourhood and all were recently renovated. We had to renovate the kitchen, do less painting and spend the time and money wisely as there is a limit to what the market will pay and you do not want to over improve the property. We saw the renovations that they had already done themselves and the quality was impressive so we discussed doing a total remodel of the kitchen by going to Ikea and slapping it together in two weeks. The kitchen was small and with new cupboards and counter it would only cost around $2500 dollars but the impression on perspective buyers would be priceless.     We convinced them to leave the upper floors with the paint that is there and spend the money and time on the kitchen. The house will then be ready to compete within its market with the other homes that have been on the market and are not selling. Everyone thinks houses are selling fast and for top dollar in Hamilton and in some areas that is true.     The last part of the game plan once the house is ready to hit the market is timing, price and commissions. I recently closed a condo that had its corporation collapse and no one else in the building has sold. We found a buyer and negotiated a deal and sold it. We have other agents calling us asking how we sold it and the answer is simple. We did our homework, presented the property properly, priced it right and offered the right commission. Five other units are sitting unsold, some are going power of sale and none of them are selling. Know your market! V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.