What is a Buyer’s Market and How Does It Affect Me?

In real estate, a Buyer’s Market, simply, is when there are more houses for sale than there are people to buy them.

As a Buyer this is a fantastic time to buy real estate. It doesn’t mean that you will get deals like we see in the U.S. but it does mean that you will get your money’s worth. It depends on what kind of a buyer you are – are you looking for a home for your family or are you getting in to investment property?

If you are looking for a family home, are you looking for a house that needs work or one that you can just walk into? One that needs work will be more flexible on price and if you are willing to start out in an up and coming neighborhood the deal will be even better. For a house that you can walk into the price won’t be as flexible. All of this depends on the kind of seller that has listed the property.

Is the seller someone who has priced their property too high in the hopes of making more money or who ‘needs’ to get a certain price? Has the seller set the price based on emotion rather than market value? Or has the seller set the price at market value?

Both the Buyer and the Seller should be relying on expertise of a qualified real estate agent to help them figure out what market value is. Those Seller’s who prefer to sell on their own can do research to find out what similar houses are selling for in their neighborhood.

When it comes to investment properties, refer to the earlier post on the subject.

What Makes a Quality Real Estate Agent?

There are many questions to consider when hiring a real estate agent. First, though, let’s look at some of the common scenarios and assumptions that we run across. Then we’ll examine what makes a good real estate agent. Probably the one we see most often is the assumption that if you just call the person listed on the for sale sign you’ll get a better deal. WRONG! Another one is that an agent can only show houses listed by their company – ie a ReMax agent can only show ReMax listings. WRONG! How about the situation where you have listed your house with an agent but have had a falling out for some reason but feel you are obligated to use that person to buy your next property. Is this true or false? FALSE! We’ll look at these in more detail.

If you call the person listed on the for sale sign, you will get a better deal. Why do people think this is true? They assume that the agent will give them an inside edge on how much the seller will let the property go for plus any details that will help them get what they want. They also assume the agent will do whatever it will take to make the deal happen, even give up commission. Let us examine why these are not the right assumptions to make. If you call the agent from seeing the sign on the lawn, you have no relationship with that individual. The agent has a contract with the person selling the house and is obligated to get the highest price possible. Part of that contract is to keep information confidential unless the seller wants it disclosed. So hoping you have an edge this way is a false hope.

Agents showing houses listed by the company they represent only. This is not the case. Agents can show houses listed by any real estate company. They have access to any of these homes. They can even arrange to show houses that are for sale by owner.

You listed your house with an agent and somewhere along the way you decided that you wanted someone else to help you find your next home but you figured that because you signed a contract with this agent to sell, that you would have to use this agent to purchase as well. Not so! The only obligation you have in this situation is to let the agent know you’ve decided to go in another direction. This would not be the case if you had entered into a Buyer’s Agreement with that agent.

How do you avoid these situations to begin with? How do you figure out what you need and where to find it? Talk to your friends, look at blogs such as this, check out internet sites until you find the items that fit what follows.

Is the agent knowledgable? This doesn’t mean the person has to have been in the business for a number of years. It means s/he has good access to information and support and is not afraid to use it. Is the agent on their own or part of a team? Teams of agents can provide good support because they are a team, depending on how they are structured. You should be able to find out in your first meeting how the team works. Does the agent offer complete customer service or do you get the impression they are rushing you into making a purchase? Does the agent offer free information to enhance your real estate purchase experience?

Saskatoon Neighborhood Confederation Park

The community first appeared on city maps in the late 1960s, with development commencing in the early 1970s. Most street names in the community are those of prominent politicians in Canadian history, primarily prime ministers, though others including governors-general have been recognized, too. Full build-out of the neighborhood did not occur until the mid-2000s with the construction of one final street, Blakeney Crescent, honoring former Saskatchewan premier Allan Blakeney. (From Wikipedia)

The north border of this area is 33rd Street, the east border is Confederation Drive and the south and west borders are Diefenbaker Drive and Laurier Drive. The area houses two schools and is near a large shopping area and many churches.

Confederation Park lay on the west side of the city and provides easy access to highways 7 and 14 which allow traffic to flow to southern Alberta. There is a mix of housing types from rental apartments and condo’s to single family dwellings known for their affordability for families. This is a good area for first time buyers or investors.

When Should I Sell?

This is the question that is asked most frequently of real estate agents. The simplest answer is: when YOU are ready. People make this part of the process way more difficult than it needs to be.

The most common mistake a seller can make when deciding on timing is to think there is a perfect time. There isn’t. Let’s examine the biggest misconception, that spring is the best time to list. Why do folks think spring is the best time? Because that is what everyone else says (group think). Because the grass is green again, flowers are blooming and everything looks pretty (the majority of people buy because of the house not because of the landscaping).

This is why anytime is the best time: Buyers buy every day of the year, even on December 25th! If you end up listing your house during a time of the year when inventories are traditionally low, you should be able to sell your house fast and at, or near, market value because you will have very little competition. Assuming, of course, that your house is in good condition in a decent area.

Be careful not to get caught up in letting your house run your life. As an example, you may have an opportunity to relocate to somewhere or it may be time to downsize but because your house isn’t selling for a price higher than market value you decide to cancel that amazing opportunity or continue to struggle or put up with a house that is way too big. Putting it off and waiting for a better day or a better price is not the right way to go as a homeowner. You bought your home to have a roof over your head, not as an investment. If you had bought a house as an investment it would have been a whole different set of criteria and you wouldn’t be living in it.

If you find yourself in a situation where you either need to or want to sell your house, the only question you need to ask about timing is “am I ready?” If the answer is yes, then proceed.

If you have questions about this or any other real estate related topic, please let us know!

Realistic Expectations Between Buyers, Sellers and Real Estate Agents

One of the difficult aspects of being a Real Estate Agent is finding out what the expectations are of the client. The client is not always forthright in what those are, not always because they don’t want to tell the agent but because the client does not always know ahead of time. It happens quite often that the only expectation of the client is to get to the goal – if a buyer the goal is to buy a home and if a seller the goal is to sell a home. There is a lot more to it than just achieving the goal. You need to get there first!

One of the difficulties in being a Buyer is not knowing what to do. Or knowing some of what to do but not knowing when to do it. Or not knowing about today’s market. The best thing you can do is ask questions. You will know you have found a good Agent if they do everything possible to answer your questions. The agent does not have know everything but s/he should be able to find out whatever you need.

One of the difficulties in being a Seller is separating from the home and beginning to view it as a house. Sometimes people have lived in their home for more than 20 years and have raised a family there. Making the move and letting strangers come in and tell them what they don’t like about their pride and joy is a very difficult thing to do.

So how do we all set realistic expectations? The first stage is to take a step back and imagine you are watching yourself in a successful transaction. What is actually happening here? Everyone is getting along and co-operating. Common sense is prevailing; the buyer pays a fair price according to what the market has shown, the seller has asked a fair price according to what similar houses have been selling for. The Agent representing each person in this transaction is negotiating according to their clients wishes but is also taking the time to educate their client on what to expect. The Buyer’s Agent and the Seller’s Agent maintain a professional relationship but do not disclose confidential information.

The idea for today’s post came, in part, from this blog: http://actvra.in/mnb

Convince a Seller to Accept Your Offer

In any type of market the buyer always wants to know how s/he can be sure that their offer will be accepted by the seller. The short answer is that you can never be sure that your initial offer will be accepted but you can work towards negotiating an agreement.

As a buyer, you want to structure your offer so that it fits not only your needs but the seller’s needs as well. The best way to do this is to find out what the seller’s needs are. Your real estate agent is the best person to do this for you.

As a buyer, your interests are best served working with a Buyers Agent as opposed to working with the agent representing the seller, known as a Listing Agent. It is legal for one agent to represent both parties in the sale of a property but it is better for both the buyer and the seller if they each have their own representation.

The seller needs to see that you are serious in your interest in their property. You can accomplish this by providing a substantial deposit with your offer. In Canada, the deposit is held in trust until possession/completion day. Deposit amount will depend on the value of the property you are offering on.

The number and type of conditions need to be reasonable and wholly applicable to the type of property. For example, don’t include a requirement for a gas line locate on a property with no garage or outbuildings and you’re not planning to add anything.

Be flexible with your possession date, within reason. We recently had a situation where the buyer and seller came to terms on everything except possession date. The seller decided they wanted it to be eight months down the road. This should have been disclosed immediately to the buyer so they could decide if it was worthwhile for them.

Be reasonable in your offer. Your real estate agent is there to provide advice for you – listen to it! They are there to work for you. They will give you a guide on what is reasonable according to recent sales of similar homes in the area .

Mount Royal Neighborhood in Saskatoon

Mount Royal is located on the West side of the city and is bordered by 22nd street on the south, Avenue P North on the east, 33rd street on the north and Circle Drive on the west.

The majority of the homes were built between 1950 and 1970 and are bungalows. The area boasts many majestic trees and mature landscaping. There are 5 schools and large parks in this area which is great for families.

As is true for many area’s within any city, there are hidden gems in Mount Royal that can only be found through diligent exploration. Shopping and personal care shops are all within easy distances in this area or you can travel to other parts of the city if you wish. You are close to major transportation routes since 22nd St turns into highway 14 and also connects to highway 7, both with access to Alberta. The city bus routes wind their way through this area as well to service the schools and the major routes.

Mount Royal is well sought out for first time home buyers for its affordability and proximity to all services. The commute to anywhere in the city is usually less than 20 minutes. Well maintained homes normally sell quickly in this area.

Home Selling Mistakes and How to Avoid Them

There are many ways to make mistakes when selling a house but today we will examine just a few of them. The topic for this discussion is showing your home.

#1 – Remember that you want someone to buy your house. The moment the sign goes up you should stop refering to it as your home as start calling it your house. It will help with the separation and move you into a position to be able to handle the business of selling. This is an emotional time but you need to work at being business-like.

#2 – Avoid being inflexible. Don’t be too strict about when you’re willing to allow viewings. If you make it too difficult for buyers to access your house they will just move on to another one and you risk losing a sale. Be as accommodating as possible; it will be worth it when the right buyer comes along.

#3 – Don’t hover. It’s natural to want to give buyers a tour of your house and point out all the good things and to answer questions. The down side is that you may cause the potential buyer to feel pressured and uncomfortable. Buyers should be left to explore on their own, at their pace.

#4 – The house is not prepared. You don’t always need to have the house showroom ready, especially if it’s a short-notice showing, but you should have your home as clean and tidy as possible. To set the right tone, make sure all the lights are on, TV’s are off and turn on soft background music. It’s okay to have a common sense reminder for folks to take off their shoes and turn lights off when they are done but don’t go overboard with instructions or notes about things.

#5 – Don’t rush buyers. If people are looking at your home with a real estate agent and you are waiting in your car for them to leave, don’t get impatient. The longer they take the better – it usually means they are interested! It can be frustrating if a 30 minute showing takes an hour but look on the positive side – it might just mean an offer is on the way.

#6 – Don’t forget the outside. Curb appeal is important – this is where the first impression is formed. Make sure the leaves are raked, the grass is cut, the snow is shovelled, the tree is trimmed; generally make sure the appearance is as good as it can be. It will pay off in the end.

One way to test your home’s appearance is to put yourself in the position of a buyer and be hypercritical. It is amazing how critical we become when we are buying a house. A clean house will sell for more money than an untidy or dirty one.

Purchasing Investment Property

With so many conflicting reports out there about investing, it can be confusing when you try to figure out what is the best thing to do when planning for the future. One avenue many people look to is purchasing investment property.

There are a few ways you can get started with your first investment property if you decide to go the route of rental property. First you need to decide what type of rental you want to have. Will it be a standard single detached home, a duplex or semi-detached, a condo? Or will it be a vacation home in a resort area? Will you live in it part time or rent it out full time?

For your first property it is suggested that you start out simple. One of the easiest ways to get started is to keep the home you currently live in and buy the next home you want to move up to. Your first home becomes your rental property and your second home becomes your primary residence. There will be some tax implications with doing this that each individual should learn about with their accountant. But this is one of the simplest and most cost effective ways of breaking into the rental market.

Another way is to put together a joint venture with a group of like-minded people. Everyone contributes a set amount of money to purchase a house or four-plex and then build on it over time.

This is not a get rich quick scheme but it is a great way to build wealth over time. When purchasing houses or property for investment purposes you do it differently than if you are buying property to live in. In the first instance you are in a position to make a profit and in the second you are providing shelter for your family. Two completely different points of view.

How to Sell Your Home in Saskatoon’s Buyer Market

First we should define what a Buyer’s Market is. In a nutshell a Buyer’s Market happens when there are more houses on the market than people to buy them. Usually people who are selling a house see this and worry about whether or not their house will sell. The only one’s who really need to be concerned are those who are trying to buy and sell within a very short period of time and expecting to make a lot of money.

During the 2007 and 2008 house price boom here in Saskatoon we saw prices double and more in some areas. Those homes are being sold now after people have done renovations, in some cases major renovations. The issue right now is competing with the high number of new houses that are being built and sold for fairly low prices.

So as someone wanting to sell a house in this market, what do you do? From our experience, buyers generally want houses they can just move into. They don’t want to have to do anything at all. Number one is to fix all the little and big things that need to be taken care of. Number two is to keep your house clean and clutter free. You would be amazed at the number of houses we see as Agents that are messy and dirty. It does not help to sell your house – yes you are still living there but you also want someone to buy it. You need to decide what is your goal and keep that in mind. Number three is price. We all think our house is worth a lot more than it actually is. The price of your house is what someone is willing to pay. They way that is figured out, at least initially, is by looking at what similar houses sold for in the recent past. Be careful not to get caught up in the details of the houses yours is compared to. The Buyer won’t do it and neither should you.

The question we get quite often is: When is the best time to list our house?

The answer is: When the time is right for you and your situation.

There is no right and wrong time to go on the market according to the market. There’s only the right and wrong time for you and your family.

For more information leave a comment or send an email.