MAKING IT PERSONAL
For many of you that have sold a home in the past, the offer process was likely a face-to-face situation, and likely too, a very personal experience. The listing agent, representing you (the seller) either came over to your home or you met in their office. They introduced you to the buyer’s representative and the conversation took place around the dining room or boardroom table.
The buyer’s rep usually started out with some pleasantries, complimenting you on your home (though sometimes it wasn’t quite so genuine depending on the condition of the home). The goal was to have everyone relaxed and feeling relatively civil with each other.
The listing agent, if they were skilled, played this event like a maestro directing a symphony.
Tell us a bit about your buyers, who they are, where are they coming from, what are their plans; the idea was to get some context and understand the people wanting to buy your home.
This is what makes residential real estate so personal and emotional. You sat across the table from each other and put the deal together based upon knowing what each party wanted out of the deal.
In the context of this market, offer night often means 5, 10 or 20 offers are emailed to the listing Realtor. Most show up simply as the offer document. No cover letter from the buyer agent explaining who their buyer is, why the seller should consider selling the home to their client, and even without indicating if their client has the financial wherewithal to complete the deal.
How do you sort through that?
Let’s provide some context.
When we have set a date and time for offer presentations, our firm has a process in place to make sure that we communicate with everyone that has been through the home and expressed interest in it. We let the buyer agents know how many offers are being registered, and which brokerages they’re from as well. We instruct agents to register their offers by a certain time (yes, there’s a form just for that: a declaration that the buyers will be submitting an offer, with no actual details of the offer). We update them at regular intervals during the day as to how many offers have been registered, allowing their clients to send in their best offer, as the sellers reserve the right to pick one or some of the offers to negotiate. In short, not everyone is going to be invited to stay at the party.
When offer day arrives, we’ll often have phone calls and emails from buyer agents asking questions, trying to make sure they get us what we need in order to have their offer considered. It’s a bit of a pre-offer pitch for some of the savvy agents, making sure the listing agent knows that this buyer agent has done their homework and prepared their buyer.
From others, we’ll get an offer emailed in, no cover letter with details about the buyer or evidence of their financial qualifications. (Some of these offers are even offering under list price – more on this in a moment.) What’s more, we see an alarming number of agents waiting until the last minute to register their client’s offer (again, that’s not the actual offer, just a declaration that you will be submitting one), and worse, skipping that whole step and just submitting the actual offer completely blind! How can a buyer be competitive in this market when they have no idea what they’re up against?
I’m amazed that someone submits an offer on a property knowing they are competing against other buyers and thinks it is still going to sell below list price. Where is the strategy and the advice from their agent on this? As a listing agent, we know the only benefit of those offers is to the seller, in that the other 5 buyers competing that night will think they are competing with people operating at the same level of interest. Had that buyer agent really been working in the best interest of their client, they would have advised against submitting that offer.
The opposite are the offers that come in and are way over the top. The seller is floored. It looks super enticing! Now the detective work starts because often that offer doesn’t have any background with it. Is the deposit available? Without conditions, how does the seller and the listing agent know this buyer is qualified and has the financial backing to make this purchase? Doubts and suspicions are never a good thing during negotiations.
Offer presentations have transformed into an online, emailed event that, for the sake of efficiency, has pushed the human side of this transaction off to the side.
It doesn’t have to be that way.
There is a lot of room for human interaction and communication during the offer process, and in a market like the one we are working in now, all the more reason to emphasize injecting some context and human touch to the process.
A buyer looking for an advantage in this market will work with an agent that understands how to put a human touch on offer presentations. Yes, the money has to be close, but there is real value in adding those human touches. Allow the seller to feel secure in knowing that they are making the right decision in choosing your offer, and you will stand out over the other offers that were just mailed in – literally and figuratively.
THE PAST WEEK IN THE GUELPH REAL ESTATE MARKET
This past week in our local market, 79 homes were sold – a significantly busier week than the previous week this year (60 homes sold) and the same week in 2020 (56 homes sold).
The median home this past week was 3 bedrooms, 2 bathrooms, and 1,510 square feet. This home sold in 7 days for a median sale price of $732,000 – that translates to $461/sqft. Sellers negotiated 108% of the original list price.
Same week last year, the median home was 3 beds, 2 baths and 1,400 square feet. In contrast, this home sold in 10 days for $599,900 – that’s $410/sqft and 103% of the original list price.
69 of the 79 homes sold this past week went at or above list price (that’s 87%). Compare that to the same week last year, where 70% of homes sold at or above list. You’ll notice that over the past few weeks, the competition for homes (as signalled by sale-to-list-price rations above 100%) appears to be easing. That being said, we’ve also noticed an arising trend of homes being priced very close to the final sale price (albeit these numbers are still double digits over last year’s prices). Too, we’re beginning to see homes receiving fewer offers – perhaps buyers are growing accustomed to adding an extra $50–100K to the asking price, and seeing an accurately priced home comes with an initial shock? We’ve been keeping an eye on this measure since the beginning of the year, and we will continue to watch it as we enter into our spring market.
You’ll find the details of the past week’s sales in the weekly reports, and if you’re not a subscriber, sign up at the bottom of this post to receive exclusive access to this sales data.
FEATURED PROPERTY:
31 TERRY BOULEVARD
GUELPH, ON
3 BED / 1 BATH / 980 SQ FT
A detached all-brick bungalow in a mature, family-friendly neighbourhood – so much potential! Lovingly maintained, with refinished hardwood, a beautiful bay window, and the sweetest eat-in kitchen. A separate entrance to the basement opens up possibility for an in-law suite, or simply more space for your family. You’ll absolutely love the neighbourhood – located on a quiet street in General Hospital neighbourhood, with an abundance of schools within walking distance, amenities hub just steps away, and walkable to the downtown core.
Contact listing agents for inquiries & showings:
Kim Hannah (519) 766-7861
Learn more about the Home Group Realty Journey
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