Seeking relief from Winnipeg’s very tight real estate market, with its many multiple offer situations, is not a simple matter. While one can jump in a lake or a pool to cool off during a heat wave, there is no quick relief from a real estate market that has become firmly entrenched over a period of years.
The RE/MAX Housing Barometer Report, released in 2011, chronicled how balanced market conditions in Canada, during the period 2000 to 2010, were based on listings and sales. According to the study, Winnipeg, by far, had the tightest market, as it was only in a balanced market condition 14 per cent of the time.
When there are not enough listings to meet strong consumer demand, there are more opportunities for multiple offers. In coveted neighbourhoods with affordable price ranges, more buyers pursue similar properties resulting in an increased number of bids.
Since a sellers’ market prevails again in 2012, REALTORS® want to inform buyers on how to act when they find themselves competing against other offers.
First, a buyer must appreciate the fact that the seller is trying to maximize the amount they expect to get when selling their home. They will employ different strategies to achieve this end. One strategy often criticized by the media , but defended by Tom Wright, president of the Real Estate Council of Ontario in a May 24 Globe and Mail article, is a seller low-balling a listing price.
Wright said the council does not regulate the seller. he added that the seller is opening negotiations with an invitation, and his council does not have the power to tell them how to attract attention to their property and negotiate a deal.
The shoe may be on the other foot when buyers eventually get the upper hand. Would a buyer be complaining if they were able to successfully negotiate a significant reduction in the initial listing price?
Similar to Manitoba, Ontario is not witnessing above list price offers throughout the province. In Ontario, it’s a situation more unique to Toronto. In Winnipeg, above list multiple offers often only occur in certain neighbourhoods.
Another development in markets such as Winnipeg’s is more active staging of homes, including set time periods to view a property, when offers can be made, and a final deadline when the seller will review the offers. Again, this is a sellers’ prerogative. They dictate how they want to market their home. It does not happen with every listing, but is not uncommon in a market where sellers are clearly in a more favourable position than buyers.
A second word of advice to the buyer is don’t shoot the messenger. The REALTOR® is not the creator of the market, but he or she can certainly help educate you on how to understand and navigate it. They will work with you to develop a good buyer’s strategy that serves your best interests. It may mean losing out on a few offers, but stick to your strategy, remain disciplined and patient as other properties will come on the market.
A REALTOR® prepares you to act on any upcoming listing meeting your chosen criteria, including being pre-qualified to finance the home you wish to purchase. By being pre-qualified, you know before hand what you can afford. As a result, you will not make an emotional decision to spend more than originally planned. If you’re really serious about making an offer, you can also get a pre-inspection during the showing process in order to avoid being less competitive by leaving it as a condition of your offer to purchase.
Your REALTOR® is an expert who provides you with the necessary market information needed to make an informed and rational choice on a property. It should also be pointed out that there is no guarantee there will be multiple offers, even in a market such as Winnipeg’s. In June, for example, roughly the same number of homes sold for below list price as for above list price, which is similarto the first half of 2012.
Talk to your REALTOR® about your own buying situation, as they know better than anyone else what the likelihood of a multiple offer situation may be on a specific home and how to be prepared to effectively deal with such a situation.
REALTORS® are your best ally during what can be a stressful process; that is, acquiring a home that suits your needs. REALTORS® are trained experts in a regulated profession who must abide by a strict industry code of ethics.