If you’ve ever had a conversation with friends about their experiences with real estate agents, you’ve likely heard some horror stories about uninformed, unmotivated, and unprofessional agents.  When you delve into the specifics, the key failing is often a lack of specific knowledge that would have helped make the process go better for the client.

When it comes to real estate investment, the situation is similar, and is arguably even more pronounced.  Take a look at some of the key results of a survey of real estate investors by the Real Estate Council of Ontario.

• 21 per cent of investors wished they had looked at more properties.
• 26 per cent of investors wished they had a better grasp of the buying process.
• 32 per cent of first-time investors said they were not prepared or knowledgeable about the home buying process.
• 43 per cent of investors said there were sections of the real estate contract that they did not fully understand.

As we read the list above, one thing became abundantly clear – most investors are poorly served by their real estate agents.  Let’s reframe the points above from the perspective of how agents failed their clients.

• About 1 in 5 agents pressured their investor clients to buy a property early in the process rather than showing them more investment options.
• More than a quarter of agents couldn’t adequately explain the process of buying an income property.
• Almost 1 in 3 agents working with first-time investors didn’t prepare or educate those clients.
• Almost half of the agents involved in helping investors buy income properties had clients who didn’t fully understand the contract they signed.

The simple fact of the matter is that while all licensed real estate agents can help investors buy an income property, a lot of them shouldn’t be doing it.

The process, the terms, the calculations to determine which option is the best investment – these are all aspects of buying an investment property that can be confusing and intimidating.  Add in changes to government rules and regulations, financing qualifications and shifting markets and you have a challenging situation to handle properly.

The good news is that picking a real estate agent for your income property purchase isn’t rocket science.  It’s all about making sure that the person you’re trusting to help you navigate you through the process actually understands the process.  Without further adieu, here’s our three rules for picking an agent to buying an income property.

Rule #1 – The agent has to be an investor as well.

If the agent is not a real estate investor as well, don’t hire them to be your agent.  They don’t need to own a slew of properties, but if they haven’t bought and sold investment properties of their own, and if they haven’t owned and managed an investment property, don’t hire them.  An agent who is also an investor is able to bring that knowledge and perspective to the search for your investment property.  They’ve spent the time in the past to figure out how to do it properly, because they’ve actually put their own money on the line.

Within the Refined team, we have years and years of experience owning investment properties.  We’ve bought and sold our own investment properties, renovated to increase rents, found and on a few occasions evicted tenants and overseen property managers, contractors, and tradespeople.  Does that help when we work with investors?  Absolutely.

Rule # 2 – The agent has to be able to do the math.

If the agent can’t calculate cap rates, fill in all the pieces of the ROI formula and generally provide you with the information you need to compare properties and decide, then they aren’t doing their full job.  If you are the one struggling to gather this information and assess what it means, you will miss out on fast moving opportunities and won’t have the time to see as many options.  You don’t need your agent to be a tax accountant but they have to be very comfortable with the math.  It’s an investment of your funds and needs to be treated as such.

Within the Refined team, we have agents who have taken courses in statistics, financial statement analysis, macro economics, accounting, Canadian taxation, international taxation and intergalactic taxation.  Well, the last one we made up, but the rest is true.  We’re very comfortable with numbers and analyzing them and we have used that knowledge to create spreadsheets to analyze real estate investments quickly and thoroughly. 

Rule #3 – The agent has to see the big picture.

In any real estate purchase, an understanding of the overall market as well as specific neighbourhoods or streets is crucial.  For investment properties, the agent needs to be able to also consider macro economics of the region.  The strength or weakness of the area’s economy impacts rental rates and vacancy rates, which in turn impacts housing appreciation or depreciation.   When the provincial or federal government announces funding for a major project that creates thousands of jobs, those new jobholders need places to live and rental properties in that area are in demand.  When a major employer in a town closes down or lays off hundreds of people, those jobseekers move elsewhere and rental properties that used to rely on them are now vacant.  The agent you hire needs to be able to place the different real estate investment options in a bigger context than just the land and building.

Within the Refined team, we have access to detailed demographics and economic data for the various neighbourhoods, communities, and regions within the GTA.  When we combine that information with specific market conditions, rental rates, vacancy rates and purchase prices, we give our investor clients confidence in their decision to buy or pass on a given investment. 

As the survey we discussed shows, there are a lot of investors out there who, in a weak moment, choose a weak agent.  By following the above rules, you can make sure that doesn’t happen to you.  If you like the sound of that, then get in touch with us.  We’d love to make sure your next income property is a star in your portfolio!

As real estate agents, we get to be front and centre in one of the most impactful moments in a person’s life.  Not just a really important moment that day, week, month or even year – In their entire life.

Buying a home is not only typically the largest purchase a person will make in their life, but it also has a fundamental impact on their life moving forward.

• The commute they take to work every day from then on? It’s because of where they live.
• The local restaurant they go to regularly? It’s because of where they live.
• The schools their kids go to, the neighbours they interact with daily, even the friends they see most often because they live close by – it’s all because of where they live.

We’ve helped hundreds of clients buy homes and we know that the importance of the decision and the sheer scale of the commitment can cause tremendous stress.  The good news is that there are ways to keep yourself calm and less stressed.

Without further ado, here are our three rules on how to buy a home without stress!

Rule Number 1 – Get Your Ducks In Order

Without a doubt, the most stressful deals we’ve been a part of involved buyers who were suddenly thrust into the buying of a home when they hadn’t prepared properly.

Time is of the essence in real estate, which means that deadlines become very real.  When there is an offer date of Monday at 6:00 p.m., we need to submit our offer by Monday at 6:00 p.m.  It doesn’t matter if there was a line up at your bank, if you were somewhere with no internet access or if you have other pressing business.  That home is being sold at 6:00 p.m. on Monday and if we aren’t ready, we aren’t the ones buying it.

We naturally have a tremendous amount of empathy for buyers who are placed in a rush situation, where we find a home they love but they aren’t ready to actually buy.  The feeling that you are missing out on “your” home is a horrible one.

As such, in order to avoid that feeling, we have very clear conversations with our clients about how we need to get all our ducks in order.

Specifically, this means:

• If you are getting a mortgage, have your pre-approval fully in place. This means an actual commitment letter from a lender after they have collected all of the proof of your mortgage worthiness.  Some clients have a conversation with a lender and are told a purchase number based on that conversation.  This is not a pre-approval and the stress levels go through the roof when after a purchase, the lender starts asking for all of the documentation and starts having issues with different aspects that may mean a lower mortgage, or none at all.
• Make sure your deposit amount is available for the next day. When you purchase a home, the deposit amount is almost always due the next business day.  If you have the funds tied up in investments or in a non-branch bank, it can take days to make those funds available.  When you are ready to buy a home and making an offer is imminent, make sure you get those funds accessible.  You may lose a couple of dollars in lost investment growth, but you gain less stress in the purchase.
• Line up other resources. When we find your home, we will shortly need the services of other people to help make this happen and to make you comfortable with the purchase. When we need a lawyer before an offer (to review a status certificate or examine a title question), having that person in the loop and ready is hugely important.  Similarly, having help in the form of home inspectors, contractors, movers and so forth ready to go means a significant reduction in the stress when you need those people.

We regularly help clients with getting their ducks in order so that when we find a property that might become their home, we don’t have the added stress of getting these things done in a massive rush.

Rule Number 2 – Control the Outcome

Depending on the type of market we are in, buyers can feel powerless.  When lots of people want a given property, it can be pretty stressful competing in multiple offers to buy a home.  Even if the market is more balanced, any purchase is still a negotiation, and the numbers involved are very significant.

Regardless of the market, we can remove stress from the buying process by deciding on two numbers for the purchase of the property.

The first number is the price we’d like to pay.  It’s based on our review of the market and your financial situation.  It’s a realistic number, but somewhat optimistic.

The second number is the price we are willing to pay if we have to go there.  It’s the price above which we say to the seller, congratulations to selling it to someone else for that price, they had more money than sense.

By identifying our preferred price and our maximum price, we can go into any purchase offer understanding the consequences.  We’re hoping for close to the first number, we’re willing to go to the second number if circumstances dictate we have to do so.  Those are the only two options.  If we can’t get the property within that range of numbers, we don’t buy it.

Simply knowing that you’re not going to put yourself in a situation where you got caught up in the negotiations and made a decision you regret can be hugely relieving.

Rule Number 3 – Knowledge is Power

One of the most intense sources of stress can be internal doubt and uncertainty.  While everyone is a little different in how they approach decision making, we have found that the vast majority of clients like to feel comfortable with the market and have seen some properties before they want to put in an offer.

We go through a deliberate process with a number of steps in order to make sure that we have seen properties that helped us determine what is truly important.  When we have completed this process, the purchase becomes considerably less stressful as our client is confident that this home represents a good value and good fit based on what they have been seeing on the market.

On the rare occasions when clients have bought one of the first homes we saw together, it has been a more stressful experience.  If you can’t compare the property with others you’ve seen, it is hard to know if it’s the best home in the world for you, or just another option.

Any real estate transaction is a big decision when compared to most decisions you make.  It is hugely impactful on your life moving forward, but the process can be handled in a way to make it feel better – and to get you better results.  If that sounds appealing, get in touch so we can talk about how to move you forward.  We will use soothing tones, we promise.

The meaning of the idiom “a level playing field” is a situation that is fair to everyone, where everyone gets the same opportunity and a situation where everyone has an equal and fair chance of succeeding.  It apparently originated in the late 1900s when then was unfair advantage given to one team in a field game if there was a slope on the field.

While providing a level playing field is supposed to mean a fair competition, where no advantage is shown to one side, it is regularly used now in situations where we’re tilting the odds in favour of one side of a situation.

The Ontario government made an announcement on October 25, 2022 about amendments to the Non-Resident Speculation tax and immediately we saw a number of pundits talking about how this is levelling the playing field in real estate.  It’s a funny reaction to one group having an increased, additional tax on real estate purchases that other groups don’t incur when they buy.  If you’re a non-resident looking to buy in Ontario, it likely felt like the playing field just tilted in favour of residents, not towards a more level field.

As of October 25, 2022, the NRST rate in Ontario will be increased from 20% to 25% and continues to apply to all parts of the province. The NRST applies to the transfer of “designated land”, which is considered land that contains at least one and no more than six single family residences.

Back in March, the government raised the NRST from 15% to 20%. The new increase to 25% makes this the highest provincial tax in Canada that exists to deter foreign speculation in the housing market.

We ran the numbers of the costs to buy in Ontario if you’re a resident or a non-resident and thought we’d share it here.  There are a few different taxes that could apply depending on the type of property, the location of the property, the history of the purchaser and where the purchaser resides, so it can get a bit complicated.  We explain how it works and run the numbers for the different situations so it’s clear.  Well, clearer.

As of September, 2022, the average price for a property in Ontario is approximately $836,000.  We’ll use that as our proxy for our various calculations on the purchase.

There are four possible taxes that can be incurred when you buy residential real estate in Ontario.  Let’s review.

Buyer Tax #1 Provincial Land Transfer Tax

The first tax applies to ALL residential purchases in Ontario and is the Provincial Land Transfer Tax.

The tax is calculated on a sliding scale based on the purchase price, and for single family residences, there are thresholds at $55,000, $250,000 and $400,000.

There is a first-time home buyer’s refund of up to $4,000 on this tax that can be claimed once.  While there is a scale for this refund as well, if the home being purchased is over $368,000, then the maximum refund of $4,000 will be available.

You can find a LTT calculator here on the Toronto Regional Real Estate Board site.

Based on the September, 2022 average price for a property in Ontario of $836,300, the Provincial Land Transfer Tax payable by all purchasers is $13,201.  If you’re a first-time home buyer who has never owned real estate before, that will be reduced by $4,000 to $9,201.

Buyer Tax #2 Toronto Land Transfer Tax

The second possible tax on residential purchases in Ontario is the Toronto Land Transfer Tax.

It is just like the Provincial Land Transfer Tax but is paid to the City of Toronto for purchases that take place within the municipal boundaries of Toronto.  It is in addition to the Provincial Land Transfer Tax and is calculated exactly the same way, with the same tax payable.  Put simply, whatever you pay for the Provincial Land Transfer Tax, you will pay the same amount again to the City of Toronto if you are buying within the Toronto boundaries.

If you are a first-time home buyer, you can also receive a refund from the City of Toronto to be applied against the Toronto Land Transfer Tax.  The amount for the City of Toronto LTT refund is slightly higher than the Ontario LTT first-time buyer refund.  In Toronto, you can receive a refund of up to $4,475 against the Toronto LTT.

Based on the September, 2022 average price for a property in Ontario of $836,300, the Toronto Land Transfer Tax payable by all purchasers who buy within the municipal boundaries is $13,201.  If you’re a first-time home buyer who has never owned real estate before, that will be reduced by $4,475 to $8,726.

Buyer Tax #3 Harmonized Sales Tax

The third possible tax on residential purchases in Ontario is the Harmonized Sales Tax, or HST.

HST can be charged on residential purchases if it is a new or mostly new (over 90% new construction) home in Ontario.  While the HST calculation is straight-forward (13% of the purchase price is added to the cost of buying it), there are a few rebates that make it significantly more complex.

The HST New Housing Rebate is comprised of a federal rebate is equal to 36% of the federal portion of GST/HST, to a maximum of $6,300 and the Ontario provincial rebate, which is equal to 75% of the Ontario portion of GST/HST, to a maximum of $24,000.

Qualifying for the rebate can be challenging and depends on a number of factors such as type of property purchased, intended use (primary residence or investment use) and more.

If you are purchasing a new build in Ontario, always consult with your real estate lawyer to determine the tax consequences of your purchase and whether you qualify for any rebates.

For our purposes here, a home of over $450,000 will not receive a rebate on the federal portion (5%) and given the average price in Ontario is $836,300, that means that the $41,815 of federal HST tax will be an additional cost on the new build purchase.

The $66,904 (8% of $836,900) Ontario HST component may qualify for a rebate of up to $24,000, meaning that any new build will incur an Ontario HST that nets out to an additional $42,904 on the purchase.

If you are buying for investment purposes, you may be able to qualify for a New Residential Rental Property Rebate.  Just like with the HST New Housing Rebate, this rental property rebate will not apply on the federal component of the HST as our purchase price of $836,300 is over the maximum purchase price of $450,000.

The provincial component of the HST may qualify for a rebate of 75% of the HST paid, up to a maximum rebate of $24,000 per qualifying rental unit.  It is possible for both residents and non-residents to qualify for this, so based on our price of $836,300, that means we hit the maximum of $24,000 for this rebate.

When we put it all together, based on the September, 2022 average price for a property in Ontario of $836,300, the net HST you will pay on top of that price, if that property is a new build, is $42,904 in HST.  If you’re a non-resident, you would have to be renting the property out for a minimum of a year to qualify for the $24,000 rebate on the provincial portion, otherwise you’d have to add that on top of the $42,904.  Given that such a buyer is a non-resident, we will assume they are buying it as an investment and will rent it out, thus receiving the $24,000 rebate just like a resident buyer.

Buyer Tax #4 Non-Resident Speculation Tax

The fourth possible tax on residential purchases in Ontario is the Non-Resident Speculation Tax, or NRST.

The Non-Resident Speculation tax (NRST) is often colloquially called the Foreign Buyer’s Tax, so don’t be confused and think they are two separate things.  In Ontario, we call it the NRST and in British Columbia it’s known as the Foreign Buyer’s Tax, but in either case it’s a tax on non-residents.

As of October 25, 2022, the NRST in Ontario is a straight-forward 25% of the purchase price.  If you aren’t a Canadian citizen, a Permanent Resident or a Protected Person, you owe an additional 25% of the purchase price.  It applies to the transfer of “designated land”, which is considered land that contains at least one and no more than six single family residences.

Based on the September, 2022 average price for a property in Ontario of $836,300, the NRST payable by all non-resident purchasers is a whopping $209,075.

So, how level is that field now?

When we look at the four possible taxes on the average purchase price for a single-family residential property in Ontario, we see that the field is in fact clearly tilted in favour of residents versus foreign buyers.

While there are four possible taxes, the only one that doesn’t treat residents and non-residents equally is (naturally) the Non-Resident Speculation Tax (NRST).  On the average purchase of a property in Ontario of about $836,000, a foreign buyer will need to have $1,058,000 available to cover the closing costs for the home.  That’s an extra $222,000, comprised of the NRST and the Land Transfer Tax.

If the foreign buyer is interested in buying a new home and renting it out to a tenant, they will need to be prepared to add another $43,000 for the HST tax on the property.  If they want to buy that new home in Toronto, then the Toronto Land Transfer Tax adds another $13K onto the funds required.

When all is said and done, if a non-resident decides to buy a new construction property in Toronto and they’re lucky to find one at the average Ontario price of $836,000, they’re looking at over 33% in taxes on top of their purchase price.  When you add that $278,000 to the base purchase price, a non-resident  needs over $1.1M to buy that $836,000 home.

While not many people in the world would think Ontario real estate is a bargain, if you’re a non-resident considering buying in the province, the list price looks like a positive steal.    If you or someone you know is considering buying in Toronto or the surrounding areas, it pays to work with agents who understand the true cost of the deal.  Get in touch with us and we’ll help make sure it’s the right move.

In the past, we’ve talked about how while there may not be such a thing exactly as Black Friday for real estate, there are opportunities to buy homes at a discounted price.

When we wrote that article back in November 2020, one opportunity we identified was when a home is sold conditional and then that deal falls through.  Such situations often result in sellers being motivated to find a new buyer and finally be done with the deal.

In that article, we talked about a specific home that was for sale and we thought we’d update you on what happened!  Here’s what we said back then:

As of right now, there is one property that fits these criteria.  It is vacant, want to close immediately and their previous conditional sale fell through.

 It’s a detached two-storey home in east Toronto, near Kingston Road and Meadowvale Road.  4 bedrooms upstairs, a den in the basement, two and a half washrooms and is less than five years old.

 It was listed September 29, 2020 for $849,900, holding back offers in the hopes of receiving multiple offers.  That didn’t happen and on October 28, 2020 they upped the price to $949,900, accepting offers anytime.  On November 16, 2020 it was sold conditional.  Two days ago it came back on the market at $949,900.

 Something went wrong with one (or more) of the conditions and as of today, it’s for sale again and has now been on the market for just under two months – 59 days.

 Do you think an offer well below the current $949K would be considered on Tuesday, December 1st as the seller looks to another month on the market starting, with the holidays only weeks away?  We would almost certainly classify the seller as motivated and willing to give on the sale price if they can get a firm deal done that closes soon.

We went back to check and see if we were right and whether there was in fact an opportunity for a buyer to scoop up the home at a discount.  The answer is yes – we were right, and someone did seize the opportunity.

The home sold a week after their return to the market at $949,000 to a lucky buyer for $925,000.  After 64 days on the market, multiple price changes and a failed conditional sale, the seller settled for 97% of their asking price.

That’s a good deal, but arguably not a great deal.  In Black Friday terms, it’s a deal, but not a Door Crasher.

If we take the idea of a Door Crasher and apply it to real estate, it would mean a property that sells for a significant discount below the list price.  In order to make sure it’s actually a great deal, it would also have to be a property where the sale price is considerably lower than what people typically pay for a similar home.

We’ve searched the GTA for the best deals that buyers have managed to obtain and here they are, your Black Friday Real Estate Door Crashers!

Door Crasher # 1 – Richmond Hill Townhouse

On November 18, 2021 our first Door Crasher sold in the Langstaff area of Richmond Hill.

Listed at $1,088,000, it sold for $880,000 after six days on the market.  That’s only 81% of list price!

It’s a freehold townhouse with three bedrooms and two and half washrooms and a built-in garage.

A very similar home just a few doors down sold almost two years ago (December 2019) for $907,500.  The average price for a townhouse has gone up 42% in Richmond Hill since then, so the fact that our Door Crasher townhouse sold for less than a comparable from back then makes this an absolute steal.

We can’t know the specifics around why the seller chose to accept such a low price, but it is clear from reviewing the sale and comparables that this home sold for a considerable discount.  With a sale price of almost 20% below their list price and likely a similar actual discount versus the average on the street, this was absolutely a Door Crasher for a lucky buyer!

Door Crasher #2 – Toronto Semi-Detached

On November 13, 2021, our second Door Crasher sold in the Trinity-Bellwoods area of Toronto.

Listed at $1,600,000, it sold for $1,300,000 after 30 days on the market.  Again, that’s just 81% of list price!

It’s a freehold semi-detached that is actually zoned as a legal duplex.  It has 5 bedrooms, two full washrooms and two half washrooms and two kitchens.  There is a detached two car garage that qualifies for conversion to laneway housing.

A very similar home a few doors down sold in April, 2021 for $1,650,000. It was also a semi-detached on a very similar lot but was not zoned as duplex.  It appears to be a similar size but has fewer bedrooms and washrooms.  It again has a detached garage that qualifies for laneway housing.

From an income perspective, the duplex would actually be worth more than a single-family home, but it clearly didn’t achieve that as it sold for $350,000 less than a nearby neighbour.

Again, it is impossible for us to know all the specifics around why the seller chose to accept such a discount on their list price.  It was an estate sale so that may have impacted their willingness to do helpful work on the home or wait for a better offer.  Given the sale price of $300K below their list price, which was already lower than a comparable sale price from earlier in the year, this was definitely a Door Crasher sale for the purchaser.

Door Crasher # 3 – Toronto Detached

On November 14, 2021, our third Door Crasher sold in the Lawrence Park North area of Toronto.

Listed at $1,499,000, it sold for $1,200,000 after 47 days on the market.  That’s 80% of the list price!

It’s a freehold detached home with three bedrooms, one and half washrooms, a private driveway with three parking spaces and a finished basement with a separate entrance.

A semi-detached home across the street with a narrower and shallower lot sold for $1,620,000 in March, 2021.  It has the same number of bedrooms and washrooms but only had one car parking.

We don’t know the reasoning behind why the seller of the detached sold for $420,000 less than the seller of a semi-detached across the street earlier in the year.  We do know that the seller of this Door Crasher originally wanted $1.799M, which means their eventual $1.2M sale price is almost $600K less than what they hoped for initially.  That definitely qualifies as a Door Crasher for the buyer of this home!

It can feel like there are no bargains to be had in the GTA given how frenzied most real estate markets are right now.  The above three examples show that not only do bargains exist, there are even Door Crashers available!  If you’re looking to buy a property and want to make sure you get the best deal, get in touch.  We’d love to see if we can’t locate a Door Crasher for you!

You can tell the veteran house hunters just by looking at them.  First, you can see that look in their eyes that says they have been hurt before.  Then, if you watch carefully, you can notice the pained expression that flashes across their faces when friends discuss their new houses.  Finally, if you pay close attention, you can see the hope that flickers briefly at each new listing before being ruthlessly pushed down before they are hurt again.

In a seller’s market, buying a house can be an agonizing, heart-wrenching process.  After going through it many times with our clients, we have identified three ways in which you can beat the crowd and buy a home in a seller’s market.

#1 Choose your Agent Carefully

Acting as a purchasing agent in a seller’s market requires perseverance, flexibility and shrewd negotiating skills.  As a house hunter, you rely on your agent to not only find you the property you want but also to help you beat out other buyers and emerge victorious.

A critical trait to look for in your agent is perseverance.  Here’s what we mean by that, in the form of a partial list of what your agent has to do for you:

• Search the MLS listings
• Send out email alerts meeting your criteria and review what is listed to see if it is suitable for your needs.
• Visit the likely possibilities, debate the merits and decide on a yes or no.
• With a yes, we review the comparables, the neighbourhood and street sales, the price the current sellers bought at and then we plan our approach.
• If it is offers anytime, we speak to the listing agent, write up the offer and we submit it for their consideration.
• They respond with some changes to the price or closing date, we discuss and strategize, respond and within a round or two, a conditional sale is made.  Over the next week, financing is signed off on, a home inspection takes place and minor negotiations take place with the seller and the deal goes firm – you’ve bought a house!

That is the typical process but in a seller’s market, a number of things change.

• In the time between our sending out listings to you to review and deciding which properties you would like to see, fully half of the listings are sold, either firm or conditionally.  We often only find this out when we make the call to book the showing, only to be told that there are no more showings allowed for that property.
• For those properties we can still see, it is not uncommon to see other agents with their clients before and after our time slot and sometimes even viewing the house at the same time as us.  The pile of visiting agent cards threatens to overflow the bowl they are placed in.
• If you are interested, we begin my work up on comparables only to be interrupted by the listing agent calling to say that they have an offer they are considering and we have a few hours to decide if we want to put in an offer as well.  We speak to see if you’re able to make this major decision to put in an offer that quickly.  In many cases, clients are understandably thrown by suddenly being placed into a multiple offer situation well before they thought they would have to decide if they even wanted to make an offer.  A small percentage decide they are still interested and we decide on our strategy and write up the offer, throwing our hat in the ring.
• The listing agent comes back to all potential buyers with a request to sweeten their offer before the seller decides which offer to deal with.  A tense conversation with you follows, where we are forced to in essence negotiate against ourselves.  We remind you of the comparables and do our best to make sure that any decision you make here will not become one you regret later.  Our offer is adjusted in some cases and resubmitted and we wait.  After what feels like an eternity, the result comes.  If we were competing against irrational buyers, we likely do not get the homeand move on, exhausted and back at square one.

It is critical your purchasing agent is willing to persevere until you find the right property at the right price.  Even the best of agents can get tired of doing the same dance of showing, analyzing and offering time and again.  If you choose an agent who is not committed, the best case scenario is you eventually let them go as they don’t seem to be putting any effort into it anymore.  The worst case scenario has you buying the wrong house at the wrong price because your agent began focusing on simply getting the deal done.

The second aspect to look for in your agent is flexibility.  This is very important as your wants and needs may change throughout the house hunting process.  As what you focus on changes, you need an agent who is able to deal with those changes and still wants to work with your new focus.  Whether it is shifting to a condo search rather than a house search, a suburb rather than downtown, or a change in your price range, make sure you choose an agent who is going to change with you.

Finally, have the discussion with your agent about their negotiating skills.  Successful transactions rely on the agents involved communicating effectively and working to make sure there are no misunderstandings.  In every transaction though, there are moments where your agent can save you thousands or cost you thousands.  This is not simply about being hard headed about prices being offered – it is about recognizing that what is valuable to the seller may not have the same value to the purchaser, and vice versa.  Exploring all the options and making sure to hold your cards very close to the chest is critical if you are going to get the right property at the right price.

#2 Take Full Advantage of Your Situation

With a carefully chosen agent on board, the next rule is to make sure you take full advantage of your situation.  This involves considering all aspects of the purchase you can decide upon.  While price is an important consideration for most property sales, other aspects can be used to your advantage.

• Do you have flexibility in your closing date?  If you can close fully in a week, you may get the property at a better price and beat out other buyers who needed more time.  If the seller wants to sell early but not move out for six months and you can accommodate that, you have an edge.
• Is your financing or insurance ready to go prior to making the offer?  If you have been pre-approved for a mortgage or have spoken with your insurance company about the type of property you are putting in an offer on, you can remove those conditions without putting yourself at risk.  At the same time you present a cleaner offer that may be more attractive to the sellers and help you beat out other offers.
• Would you make a great addition to the neighbourhood?  In many cases, sellers are leaving friends behind in the neighbourhood when they move.  If you and your family would be a good fit with the neighbours, make sure your agent lets the seller know that.  Children close to the age of others in the neighbourhood, friends who live in the area, compliments on the garden and a promise to keep it looking as lovely – all these things can tip the scales in your balance when the seller is deciding on your offer.

#3 Buck the Trend

The final tip is one that by its very definition is not typical for many purchasers.  Go against the grain when it comes to the type of property you are looking for.

• If loft style apartments are all the rage, you can find a lovely condo with slightly lower ceilings at a great price.
• If everyone is looking for move-in ready properties with redone kitchens and bathrooms, consider houses that need some work in order to meet your standards.
• If parking is not critical for you and many people won’t even look at houses without a parking space or two, then you face far less competition for a property that still has value for you.

The key here is not that you give up on aspects you love and settle for a house that is somehow less than what you wanted.  Instead, work with your agent to identify those factors that you are ambivalent about that many others value highly and work to avoid properties with those factors.  By doing this, you can avoid paying more for a house with features in it you don’t particularly want.

By choosing your agent carefully, taking full advantage of your situation and bucking the trend, it is possible for house hunting in a seller’s market to still be fun, lucrative and successful!

If you want to beat the crowd, then don’t hesitate to get in touch.

Deciding how much to pay for a property is an intense process.

Depending on how long the search has been going on, your financing options, the market dynamics at your price point, location and housing type, as well as your own personal situation, when you reach the stage where you’re actually putting pen to paper (or more likely these days, clicking on a digital form!) it can be very stressful to come up with the number to put down on the offer.

There’s a simple way to remove lots of the stress from the offer process – decide on your options beforehand and go in prepared.

It begins with us doing our work examining comparable sales, equalizing for differences, analyzing market data and current trends and presenting you with our purchase pricing scale.  This gives you three prices that we can use to decide on our approach going in and our reaction to what happens during the offer process.

Here’s an example of what the purchase pricing scale looks like.

Now let’s go over what each price point means and how you use the scale to get the property you want, at a price you’re comfortable with!

A Good Price

This specific price is the point at which we can say with great conviction, anything below this price is a good price.  The further below we go, the better the price, but anything up to and including this price is a good price.

When you talk with friends or family and compare prices for real estate, you’ll feel good about how much you paid.  When it comes time to sell and you realize an amazing return, you’ll feel great about how much you paid!

If you buy the property at or under this specific dollar amount, you’ve got a good price.  It’s that simple.

An Acceptable Price

The second price we identify is the point up to which we say the price is acceptable.  It’s not going to make us jump up and down necessarily, but it is most certainly acceptable.  We aren’t going to have any problems with an appraisal coming in for less and no one is going to raise their eyebrows at you if you discuss how much you paid for your home.

If you buy the property for more than the price we identified as the Good Price, but up to this price point, you’ve bought it an acceptable price.  It won’t feel like you got a bargain, but you also won’t feel like you made a hasty decision that you’ll regret.  The most likely way you’d describe it is that it was a bit more than what you’d hoped for but you’re still really happy with the purchase.

The good news is that as time passes and real estate prices grow, an Acceptable Price doesn’t take too long to become a Good Price!

A Necessary Price

The final possible price is what we’re calling a necessary price.  This is any purchase price over what we have identified as an Acceptable Price.

To be clear, this is not a bad price or you over-paying for the property.  Calling it either of those indicates that we somehow made a mistake or were taken advantage of when we bought at this price.

It’s called a necessary price because it was the price you HAD to pay to get this property.

Maybe it was because of market conditions, because of your situation, because of multiple buyers competing for the property – regardless of the reason (or reasons), this is the price you had to pay to get the home.

To be clear, calling this the necessary price doesn’t mean you’re willing to pay it.  In many cases, this may be the price beyond which you just aren’t comfortable paying as you know it will take some time to recover that via price appreciation.

Regardless of whether you decide to go to this price or not, it’s still the necessary price to be paid to buy the property.  By understanding what that price is beforehand, you are in a much more comfortable place if the offer process ends up at this point.  The decision then is whether you want to pay this price, knowing that it is beyond what “should” have been paid in other situations.

Without a doubt, buying a home is a stressful experience.  The biggest element of that stress is being forced to make a high value purchase when you aren’t ready to do so.

When you enter into an offer process with an understanding of what good, acceptable and necessary prices are for the property, you remove a lot of that stress.

Our goal remains to get you the property at the lowest possible price and by understanding the different price points in our scale, we develop an offer strategy designed to do that.  Given we can’t control the market or seller’s behaviour, this approach is helpful in making it clear whether where we end up is good, acceptable or necessary.  It relieves stress, makes decisions easier and results in a better experience.

If you are looking to buy a home, you need to work with agents who understand both how to assess property value as well as prepare you for the offer process and how to get what you want at a price you are willing to pay.  By doing so, you will never be in a situation where you get caught up and make the wrong decision.  If that sounds appealing, get in touch!