Stop Toronto’s bidding wars
Rachel Sa – Canada.com
Here’s a lil’ tip for you, Toronto homebuyers: Want to stop bidding wars in this city? Don’t get into one.
Sure, that may be more easily said than done, especially when you’ve checked out a possible new home and gone all googly-eyed over the granite countertops or the original wood trim or, that rarest of all Toronto real estate finds, the backyard.
Comment: But that makes no sense. If you want – or need – a house, you have no choice. Listings are so low, supply is VERY low right now. Unless you buy a crappy house in a crappy neighbourhood, you are likely to have to compete for a house. It is just the way the market is. Unless we get 1,000 new sellers tomorrow, it is going to stay like this for a long time yet.
But the Real Estate Council of Ontario (RECO) tells The Star that about 30% of the 15,000 inquiries RECO received this year were from house hunters frustrated by bidding wars.
Comment: Because it is human nature to complain when we do not get what we want.
Not only do bidding wars drive up the cost of home ownership, they often force buyers to pay more for less. Sometimes, a LOT less. RECO has actually launched transit ads and a YouTube video warning people not to skip the ever-important home inspection just for the sake of winning a bidding war.
Comment: No, no one FORCES anyone to do anything. People make their own decisions. Sometimes they are not the best decisions. But no one forces them to do anything.
That’s right – Torontonians are actually signing on the dotted line for the biggest purchase of their lives without confirming that their “dream” home could use a new roof, a new furnace or be on the verge of collapse. ‘Cause you know that makes a tonne of sense, saying to the seller: I’ll pay you MORE for a house which could very well be worth less. I’m willing to take that gamble!
Comment: Blame that on listing agents, they want “clean” offers with no conditions. That benefits no one. Without a finance condition, the bank could say no to the buyer on closing – which means the seller has to put their house back on the market months after it first sold. If they have bought… ooh, not good. And without an inspection, an angry buyer could sell when defects are found later. Let it simply be about price and closing date, let’s leave the conditions in – the protect EVERYONE.
Stop gambling, Toronto, and think of the rest of us. When you allow yourself to be sucked into a bidding war, you keep the bidding wars alive. Don’t feed the beast.
Comment: But it is simply not that easy. Many people want to live in certain areas, more than the houses that are available. Thus, they have to compete for these houses. Do you really expect that many people to just stop looking for a house? What happens when they all start looking again? Same problem. Are you going to come with a time table, so only certain people are allowed to buy this month and others next month? It is all fine and dandy for you to tell everyone to stop, but it simply is not practical. And to be honest, a good half of my clients avoid bidding wars, they just stay away from them. I expect that is the same with other agents. So that means a ton of people are already staying out of the bidding frenzies! What you see are those who really really want those houses.
In the meantime, check out the cautionary video from RECO, complete a mournful piano soundtrack and a sad-eyed, pouty-mouthed child suffering the fallout of a hasty home purchase. Look at that kid’s face – and back down from the bidding war.
And, take a look at the stats on the hot Toronto housing market.
Comment: But what do the stats show? Only that prices rise, year over year. So buying now means your house will be worth more in the future. That does not really support your argument. People, list your homes! That is the only way to stop the madness. As much sense as that makes…
Contact the Jeffrey Team for more information – 416−388−1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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