This is a story about a home and 3 agents. Let me set the stage.
- Listing agent: Me… a local Durham Region agent.
- Buyers agent: Local agent with more than a decade of experience.
- Buyers agent: Based in Mississauga with less than 3 years experience.
Over the past week, I placed a “fixer-upper” bungalow on the market. It was something that would work for an investor to buy and create an apartment in the lower level. (Legal or not.) The home was in poor condition and sided on to a busy street. I listed the home at market value.
Here is how the story of the sale unfolded:
Over the first 4 days, we had 44 groups tour the home with both agents or during two open houses that we hosted. On the 3rd day of marketing, we received an offer. The offer was from a local agent with no conditions and at a price that was slightly under asking. After notifying all of the agents who had shown the property, we received a second offer from an out-of-town agent. This offer was dramatically under the asking price with 2 long conditions. No surprise, the Seller chose to work with the local agent’s offer, countering for a bit more money and making some “housekeeping” changes in the offer.The offer was promptly accepted.
When I reflected back on how the process of the sale took place a few thoughts became apparent. At first I felt bad for the Buyer who didn’t get a chance to purchase the home. Whenever there is more than one Buyer bidding on a home, one of the Buyers is left frustrated, and for this I feel for the missed opportunity.
What I sensed was that the local agent understood our market and what was needed to happen for their Buyer to be successful. The offer came in at a good price, and expecting a counter to a higher price, but an offer that we could work with. The other offer had little chance of acceptance. Other than a price that was more than $50,000 lower than asking, one of the conditions was on mortgage financing, with no pre-approval indicating that the Buyer had been to a lender. When I think about the low price the second Buyer offered, I thought about how an agent can quickly determine the percentage of asking price homes in Oshawa are selling for currently. Checking this morning, the average home selling over the past week sold for 4% over asking. This is a critical “puzzle piece” that is necessary when creating a winning strategy when competing on a home with several offers.
Being a local agent for 4 decades has taught me that Real Estate tends to be a local business and that the agents that know the neighbourhoods tend to create winning strategies for not only the Sellers they work with but in helping Buyers secure homes.
Another experience I had on the weekend was touring 3 homes for sale with a Seller I am working with who has a home that will hit the market in the next few weeks. He was curious to see what his competition was and we toured 3 homes all listed with out of town agents.
Two of the homes were what I refer to as “fix and flips.” Homes that were purchased by an investor, renovated and then placed on the market at a price hoping to make a profit. My experience led me to believe one of the homes was priced $150,000 over market and the other about $90,000 over market price. The third home had a rental suite that the listing agent saw value in. I believe this home was, again, about $90,000 over market value. All three homes have had price changes with one reducing the asking price by $40,000, one by $149,000 and one increasing the price by $70,000.
Knowing the local market is critical to selling or buying a home at market value within a reasonable time period. If you are planning a move, my advice has been, for the past 40 years has been to interview local agents for the job and then choose the one you feel best fits your needs and has the experience to get you moved at the right price and with the least headaches.
If you have questions for a local agent, I can be reached at lindsay@buyselllove.ca or 905-743-5555.
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