If you’ve been following the headlines over the last couple of months, you know that real estate conditions are going through a significant shift. For the past two years, the nation was abuzz with non-stop talk about the booming housing market.
Properties sold at record speeds as buyers competed for the few listings available. Nearly every listing received multiple offers, and all-out bidding wars became common, pushing the already soaring prices even higher.
Some forward-looking buyers tried to bypass the fierce competition by submitting bully offers (also known as preemptive offers).
There are several different types of offers you can expect when selling a home. Find out more in the articles below:
- Should You Ever Accept a Bully Offer
- 4 Things to Know About Conditional Offers
- Quick Tips For Dealing With Mulitple Offers
What Is A Bully Offer
In a strong seller’s market, there are more buyers looking for homes than there are homes for sale. As a result, most homeowners set a presentation date which is when they will start to accept offers for consideration.
A bully offer is when a buyer sends in their bid before the official presentation day.
Since the intention is to edge other buyers out, a bully offer must be compelling right out of the gate. It is almost always unconditional and well above the asking price. In addition, it will have a short deadline that the seller must respond to quickly.
During the height of the housing boom, bully offers were so common that sellers came to accept them as a normal part of the process.
No one expected the rapid growth in the housing market to last forever. Still, we are all surprised at how quickly conditions have changed. Houses are not selling within days of being listed. Multiple offers are no longer a sure thing, and bidding wars are happening far less frequently. In fact, some homes aren’t selling at all and have to be relisted back onto the market.
The change can be attributed to a few different factors. The rising interest rates may have triggered the shift. Many buyers who were already intimidated by the surging housing prices were simply not prepared for the cost of borrowing to increase.
As Costs Increase, Buyers Bow Out
There is more to the story, however. Even though rates have gone up, they are still lower than they have been in decades. What else could be behind the rapid shift in the market? Recently, the provincial government raised the foreign buyers’ tax to 20% to discourage speculation from other countries. And the federal government is toying with the idea of banning foreign purchases altogether as we attempt to address the housing shortage throughout Canada.
However, inflation is perhaps the biggest culprit. Gas prices recently soared to over $2 per litre, driving up the cost of all other goods and services. Faced with this high cost of living, many people, especially first-time buyers, are stepping back to wait things out. Fewer buyers searching means more options and less competition for those still in the market.
So Far, The Market Still Favours Sellers
Despite all of the talk of a market shift, conditions still strongly favour sellers. A balanced market means at least six months of inventory available. According to the Canadian Real Estate Association, there were 2.2 months of inventory at the end of April. The seller’s market remains strong even though it is not as hectic as when it peaked earlier in 2022.
Bully Offers Still Happen
Multiple offers, bidding wars and bully offers are all still happening, just not on every listing. There are still a few very desirable pockets where buyers compete fiercely to land their dream home, especially in the GTA. If you’re a homeowner in areas like High Park, Roncesvalles, or Bloor West Village, your listing will likely attract plenty of attention from potential buyers.
There are many things you can do to make your home stand out when you decide to sell. Careful preparations can mean the difference between a quick sale with multiple offers or your house sitting on the market. The presentation of your home is crucial, especially if you’re not in one of the most desired areas.
Want to know more about some of the hottest neighbourhoods in the West? Here are some other posts you may find interesting:
- The Best Neighbourhoods in Toronto for Young Families
- The Best Toronto Neighbourhoods for Foodies
- Four West End Neighbourhoods for Young Professionals
How To Make The Most of Your Sale
The small details matter greatly when showing your home to a potential buyer. The more they imagine living there with their families, the more motivated they will be to offer over asking, especially if other buyers are interested in the property. Here are just a few ways to make your listing stand out.
Add curb appeal: Potential buyers unconsciously judge your home the moment they lay eyes on it. That’s why it’s essential to create a positive first impression by cleaning up the yard, removing all debris and pulling the weeds. For added effect, consider adding a garden or potted plants throughout.
Clean, clean and clean some more: The importance of cleanliness cannot be overstated when selling your home. Again, a buyer makes quick judgements, and nothing can turn them off faster than a dirty bathroom or piles of clutter everywhere. When preparing your home for sale, imagine that you are getting it ready to be on the cover of a magazine.
Minor repairs and updates: You would be amazed at the difference a fresh coat of paint can make. Your house instantly appears brighter, cleaner and newer. Also, fix any broken handles and knobs on cabinet doors and consider replacing the silicone around your sinks and bathtub.
Should You Work With A Real Estate Agent?
Selling a home is always challenging and is even more so during a shifting market. A local real estate agent can help you highlight the most desirable features of your home even when there are fewer buyers. When choosing an agent, be sure they have experience in all market conditions, not just during a housing boom.
Are you thinking about selling your home? It is the perfect time as market conditions are still in your favour. Want to know more? You can book a free, no-obligation meeting with us right here.