Saturday 24 February 2018

Market Snapshot: February 11-17, 2018

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

 
Total Sales: 127
Average Price:
$485,699 
Median Price: $468,700
Avg Days On Market: 30
 
 
Sales volume remains tepid, but not unusually so for the time of year. 
 
Average and median sale prices drew back a bit, both dropping below $500k.  The fluctuation is typical for a week-to-week comparison though.
 
Time on market dropped somewhat significantly below normal this week.  It might be just be weekly fluctuation, or could be an early indication of the spring market starting to kick in.  If it continues to drop or stay below normal for a few weeks, the latter is more likely.
 
Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

Thursday 22 February 2018

When your purchase goes stinky on inspection

A majority of the time, property inspections go well enough, with only small problems and maintenance items identified.  But sometimes they don't go as expected at all, with the inspector uncovering a significant defect or cause for concern.

It can get "stinky" pretty quickly... especially a septic inspection. (hah!)

While septic inspections can be the stinkiest of course, any inspection is an opportunity for things to go sideways.  A home inspector may stick their head in the attic and discover mould or animal damage, or a septic inspector could identify problems you'd never be able to find on a casual viewing like you would at a showing - often the access to the system is buried and not even visible until it is dug out for the inspection.

At one country property, the septic specialist was concerned as soon as he took the cover off and saw the tank was badly worn.  From there it went downhill, as the system was old and its location on the property was okay when it was installed but would never be allowed today.  Between the slope of the property and the location of the house and well on the lot, replacing the septic system would have been a huge headache and cost significantly more then usual for an advanced system that would be able to pump up hill, and having to decommission the well.  The off-hand estimate at the time was $50-60,000 total.

Needless to say, the buyer didn't proceed with that purchase.  The family was sad because the house seemed perfect in many ways.  But it would not have been prudent to buy the house, knowing the septic would probably need be to replaced within a few years and the problems they'd have (not to mention the expense).

When a purchase falls apart because of a bad inspection, it's tempting to feel like you've wasted money.  But can you imagine if the buyer above didn't have an inspection condition in the offer?  They would have bought the house without knowing about that problem, and then it would have been an unpleasant surprise later on when they had to change.  That huge expense would have been much "stinkier" than losing the fee on an inspection!

We always try to identify problems before we even make an offer, but there are limits within the scope of a normal showing, and sometimes things just get missed because we're human.  Whenever possible, buyers should try to include appropriate inspection conditions to protect themselves.

And consider it a wise investment if it does turn up something bad enough to cancel the purchase. The alternative can be much worse.



Friday 16 February 2018

Market Snapshot: February 4-10 2018

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

 
Total Sales: 118
Average Price:
$525,984 Median Price: $482,500 Avg Days On Market: 37
 

Sales volume is pretty typical for this time of year.  

Average and median sale prices have been advancing slowly but steadily, with the average now back over the $500k point that we were starting to see last year before changes to the mortgage rules.  

Time on market is still pretty typical, with properties sold this week being on market slightly less than the historical norm of 40-45 days. This is a slight improvement over the last few weeks.
 
Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

Tuesday 13 February 2018

When it's time to sell, don't get bought

Have you ever been bought?  I know, I know, what kind of question is that.  But in the real estate business, there is a term "buying the listing" that many people are blissfully unaware of.

Buying the listing refers to inflating the value opinion you give on a property to sway the sellers to list with you rather than your competition who might give a lower - but more accurate - price evaluation.  Because once they have you listed, you're stuck with them under contract even if you reduce the price.

Just to be clear, we're not talking about when the seller gets advice and makes the decision to list higher anyways - and sometimes the market does surprise even the professionals.  This term refers to an agent intentionally inflating their price opinion to stand out from their competition.

You might ask, "WHAT?  Does that really happen?"

Sadly, yes.  I think most of the time it is an honest difference in price evaluation and most agents are decent folk like anyone else, but like any business we have our mix of all types. 

I have sometimes seen sellers I have given a price evaluation go and list with someone else at a higher price.  Sometimes a much higher price.  And then sit on the market for a while before eventually selling at a price close to what I said in the first place. 

As I watch these scenarios, I can't help wondering if they were just "bought" by an agent giving a higher price evaluation or if it was the seller ignoring advice and listing high.  And I sometimes wonder if I would get those listings by simply inflating my price evaluation.  Moot point, of course, because it's not my style.

To avoid this happening when you are looking to sell, if you have two price evaluations done and one is higher than the other, at least get a third to see how they compare.  If the third is still high, then give it a try, because maybe there is something the lower one is missing. 

But if it's closer to the lower one, give it serious thought before listing with the higher price agent or you might regret your choice after wasting much more time getting sold than you should have.

Saturday 10 February 2018

What is my house really worth?

When you're thinking of moving, one of the first questions you're going to have is "what is my house worth if I sell it?" 

This is a natural place to start considering that what you sell your current house for will determine what you have available for your next purchase. So who decides the value of your house?

Let's start with who doesn't decide.

Your property's value is not decided by your real estate agent.  They're going to look at recent sales activity and current listings to try to figure out what your house should be listed at, based on actual market data.  But in the end, the seller has the final say on what the house gets listed at, as well as what offer they will accept.

A property's value is also not decided by an appraiser.  They go through a similar process to what agents do, looking at sales data, refining the numbers to a more detailed analysis of differences between properties.  But while their appraisal report may determine the value that a particular bank or lender may accept, they don't really decide the market value either - their job is still just to try to 'uncover' what the likely market value is.  If an appraisal comes in low, it's up to the seller to decide whether to reduce the selling price to make it go through.  Sometimes a seller will never get a better offer, but there have been plenty of times where I have seen a sale fail on a low appraisal, only to be successfully re-sold at a higher price with a new appraisal accepting the higher price... so was the original appraiser's opinion really right?  It was probably honest, but honest doesn't mean infallible, especially in an open market.

Seeing the seller's involvement in the process, you might start to think you decide the value as the owner.  But you'd be wrong.  The seller certainly factors into the selling process heavily, but the seller's opinion on the value doesn't matter if no one wants to pay that much. To exaggerate the point, you can list your typical single-family house at $10 million, but that doesn't mean buyers are going to line up to pay you that much.

Ultimately, it's those buyers in the marketplace that will decide the value of the property.  This gets forgotten in a hot sellers' market, but it remains true nonetheless - the buyer with the winning offer in a bidding war still set the price they were willing to pay for the property. If they hadn't been willing to pay that much, they wouldn't have made the offer.  And even in a hot market, there's a limit to how high you can list a property and get away with it.

The working definition of "market value" presented by the Canadian Real Estate Association is "the highest price in terms of money, that the property will bring to a willing seller if exposed for sale on the open market; allowing a reasonable time to find a willing buyer, buying with the knowledge of all the uses to which it is adapted and for which it can be legally used, and with neither buyer nor seller acting under necessity, compulsion nor peculiar and special circumstances."

A bit of a mouthful and some moving parts in there (ie. 'reasonable time' changes depending on market conditions), but essentially it's the most an informed buyer is willing to pay without unusual pressure or circumstances.

A good real estate professional will be looking at actual sales data in your area to try to estimate what this is, so their opinion is far from worthless - it's based on what real buyers have been willing to pay.  But in the end, it's still an opinion and actual performance in the market could easily vary either direction, because buyers can be unpredictable. 

When it's time to move, just make sure you choose an agent you trust and fully discuss pricing, marketing strategy and your expectations from the sale. 

If you'd like an opinion on your property's value, give me a call at 905-512-4069 or email jeff@jeffsellshomes.ca and I'd be happy to help.

* not intended to solicit clients currently under contract

Friday 9 February 2018

Market Snapshot: January 28-February 3, 2018

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

 
Total Sales: 107
Average Price:
$509,912

Median Price: $477,500
Avg Days On Market: 42
 
Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.

Thursday 8 February 2018

The Real Power of the MLS® System

The Multiple Listing Service® (MLS®) system is often thought of by the typical consumer as a simple advertising system – a fallacy propagated by media and companies who think it is the magical solution to helping owners sell their own homes.

Unfortunately, this misunderstanding was probably started - or at least helped along - by real estate agents unduly weighting the advertising exposure as a benefit of the MLS® system.

But the reality is that the MLS® system as an advertising system is nothing special – it’s just a website that provides information, and is not the magic bullet for owners who want to sell on their own. The real purpose of the MLS® system is to facilitate collaborative selling between real estate professionals.

Some might scoff and say that this is out-dated thinking, but I would reply that the proof is in the results: if buyer exposure was the real power behind the system’s success, I would find buyers and sell more of my own listings rather than another agent bringing an offer. But at least 90% of the time, it is another agent that ultimately sells my listing, and you would find this is pretty typical in the real estate industry.

This raises some interesting questions.

First, if the MLS® website is an automatic source of buyers, why am I not selling more of my own listings - why so many other agents bringing offers?

Next, why should a private seller expect better results than a professional working at it full-time?

The answer is simple, as much as some companies would hate to admit it, since it takes the wind out of their marketing pitch. The real power of an MLS® listing is that you have a huge professional sales force working for you - well over two thousand in the Hamilton-Burlington area alone - who are not paid unless results are delivered. When you list your home and offer a selling commission, you give them access to complete information on your property and (usually) commission as a motivation to sell it to buyers they come across in their day-to-day dealings.

The funniest thing about this is that I have actually seen one for-sale-by-owner company suggesting on their website that this “cross-selling” is a bad thing. Their website forewarned that your real estate agent may show your house but not sell it, instead selling the house down the street. This may be true, but it entirely neglects to mention all of the agents "down the street" who may first show their listing but end up selling yours.

Again, when you sign an MLS® listing with a traditional full service agent, you have the entire REALTOR® population working for you indirectly as a sales force, and you don’t pay them a thing unless they sell your house. So when you stop and think about it, cross-selling by full-time professionals is not a negative but rather a huge positive.

Indeed, those professionals are the real power behind the MLS® system.

Monday 5 February 2018

MID-WINTER CHILL ON SALES

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 660 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in January, 27.2 per cent fewer than the same month last year and 12.5 per cent lower than the 10-year average for the month.

All property listings were 6.3 per cent higher than the same month last year and 22.3 per cent lower than the 10-year average.

“We definitely saw a .."

[CLICK HERE] for the full report

Friday 2 February 2018

Market Snapshot: January 21-27, 2018

Local MLS® Sales Data
All Hamilton Real Estate Districts Combined*

Total Sales: 117
Average Price:
$473,900
Median Price:
$450,000
Avg Days On Market: 42

 
Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown 

** Not intended to solicit clients currently under contract.