When Neighbours are not your Best Friend
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A client over the past few weeks had an interesting experience with their property. The home was a bungalow in need of some work and the Seller decided to list it with us and get the property on the market and sold. Prior to getting the paperwork signed and getting the home listed for sale, the next-door neighbour approached the homeowner and offered to buy the home, “cash.” After the home was listed for sale, the neighbour was a bit upset that the homeowner did not take his offer.
This reminds me of the saying, “A verbal offer isn’t worth the paper it’s written on.” We ended up placing the home on the market and the property, after 100 showings, received 5 offers with one being more than $100,000 over that asking price. Looking back on what the neighbour had offered verbally the home sold for $65,000 above the private offer.
In many cases when a private individual or a corporation, (called wholesalers) are interested in an individual property, they are looking to deal directly with the homeowner and settle on a price lower than what the home would receive on the open market.
If you think about it, when a single buyer is interested in a property, the Seller has less negotiating strength than if, as in the home we just sold, has 5 Buyers bidding to buy the property. Marketing to the largest pool of Buyers is a tried-and-true method to ensure the Seller ends up with top dollar.
Looking at the results of the marketing, and the Buyers who looked at the virtual tour the majority of the Buyers came from Toronto, seconded by Oshawa Buyers, and followed by Markham and Willowdale. It is hard to determine where the Buyers live that end up attempting to purchase a property, however of the multiple bids we received the Agents came from Markham, Toronto, Ajax and Newmarket. The goal is to find Buyers in any part of the GTA who are prepared to pay market value or more when an Agent places a home for sale.
One of the misconceptions is that by listing with a “Toronto” agent the home will have access to more Buyers than if a local Agent is chosen, and this could not be further from the truth. A local Agent, one that is experienced will know which areas to advertise the home to to draw the most qualified Buyer,
When I look at marketing a home in Oshawa, where the average detached home has a value of 926,000 some of the areas I market our Oshawa homes to are Burlington, (average home price $1,479,000) Mississauga, (average home price $1,567,000) and Markham, (average home price $1,875,000.) Understanding how to connect with agents and Buyers in these areas is a key component when marketing Durham Region properties. A funny comment a showing agent from Burlington made recently was “Everything is on sale in Oshawa.” Knowing our prices are some of the lowest in the GTA means that targeted marketing is critical to find Buyers willing to pay top dollar for homes.
Another example of how a local agent has a “feel” for the market in the Durham Region is how they go about managing the presentation of offers on a property. Some homes are listed for sale with a date set for reviewing offers, others ask for 48 hours to review an offer once it comes in and other instances whereby Sellers are open for offers at any time. Knowing the local trends allows the agent to create a marketing strategy that will get the best results. We chatted with a Buyer recently who had toured a home at an open house listed with an agent from downtown Toronto. A quick check showed that the property was listed at $60,000 higher than the last sale, and the conversation with the Buyer concluded that we would take a wait-and-see approach. The listing agent was holding offers to a specific date and once that date passed, the Buyer is still holding off not understanding the strategy given that in a busy Seller's market. This property has been on the market for over 2 weeks at the original listing price.
Real Estate is as simple or as complex as a person wants to look at it, however with marketing, the basics have never stopped working in any type of market.
- List with a local, full-time agent who has experience in not only your neighbourhood, but also in the current market conditions.
- When building a marketing package, used 3D virtual tours and floor plans.
- Create a strategy of managing the presentation of offers to create the most effective process to benefit the Seller.
- Advertise the property to areas where the average selling prices are much higher, attracting Buyers who are priced out of the areas they currently live in.
- Be wary of a “one-off” Buyer. Typically, homeowners will end up with a much lower price than if the property is marketed to a larger pool of Buyers.
- Interview agents prior to deciding to work with one. Trust is the most important quality of a good Seller/ Agent relationship. Once you trust the individual, the strategy flows in the correct direction.
If you have any questions about the current market or are interested in reviewing how marketing in Toronto may put more money in your pocket, I can be reached at 905-743-5555 or firstname.lastname@example.org
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