Real, active buyers out in the real estate market right now are pretty few and far between.
Sure, there are lots of people out there watching intently, wondering if, when and why the time will be right to potentially jump back into the fray. After all, with transaction volume all but frozen thanks to sharply elevated interest rates and consumer sentiment abjectly awful, the landscape doesn’t feel particularly hospitable.
Nonetheless there are real buyers out there – dismiss them as tire kickers or bottom feeders at your own peril! I know this because I had a front row seat with a property that I listed and sold over the course of five days last week.
It was actually pretty fascinating.
For context, it was a condo townhouse in one of the more desirable pockets of the city. The interior wasn’t the freshest but we worked hard on preparation and staging, so it looked great and the possibilities seemed endless. I was fortunate to have sellers with realistic expectations anchored in both the data and the current market conditions.
Mindful that we were creeping into the holidays when the market will likely slow even more, we ultimately agreed to list on the lower end of a range we landed on, and the market responded in a decisive way with 26 showings, three offers, and a firm sale at 100% of list price.
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A few things I gleaned from this: the real buyers out there right now are not playing games. If you’re hoping they’ll bite on your property, you’d better not be either.
Second, buyers know who has the leverage right now. Conditional offers should be expected.
Lastly, and perhaps most surprisingly to some, multiple offers no longer automatically equate to selling way above list price. There are countless examples of recent sales where multiple offers still didn’t get to asking price. Having to negotiate is the new normal and it’s time for sellers and their agents to accept it.
Yet many wont.
Here’s a perfect example:
I have a client who has a very specific wish list for a pied a terre in the city. He’s motivated and ready to buy with a speedy close. We’ve drilled down on one building that would be ideal. One unit we saw and it looked promising though was priced almost $60,000 more than another virtually identical unit a few floors up.
This other unit was similarly intriguing but basically impossible to get access to – appointment requests were routinely ignored. After finally previewing the property and later speaking with the agent I learned a few things: they had strategically priced it below seller expectations as a means of driving activity and interest. Apparently, they hadn’t noticed that that type of play isn’t supported in a market like this – it only serves to waste people’s time.
It had already sold once conditionally on financing and the deal fell through. The experience has been extremely upsetting to the seller. If we wanted access again, we would need to submit a conditional offer at a number she felt was reasonable. But also, the seller had told me, she needs to sell.
Make it make sense.
The other unit in the building has even less action, the agent returned not one of my three calls – I simply got lucky on my fourth attempt. He could not have cared less that my client was contemplating an offer.
Across the board the attitude seemed to be that the only opinion of value that matters is that of the seller’s. Why would they sell for less when the spring will be better, they said.
Oh, if willing could make it so.
But what if they’re not? What if best case scenario the prices only flatline for a while? What is that going to look like if this kind of magical thinking endures? Agents who are propping up this kind of behaviour will be doing a disservice to their clients and their colleagues.
These two tales from the trenches feel striking in juxtaposition. This market will no longer support the types of games and manipulation so common during the run up.
Who is going to tell them?