Tips for buying a home in a hot Saskatoon real estate market

Tips for buying a home in the hots Saskatoon real estate market

Cass poses a question in another post regarding the hot Saskatoon real estate market. By the time I finished my response I realized that I had written a whole new post so I brought it up front for the rest of you.

If any of my real estate friends have something to add I would really appreciate your input and I’m sure Cass would as well.

Cass said: My husband and I have put offers on 3 different houses and 2 were in bidding wars.  The last house we offered $7,000 over asking price and the house went for $26,000 over asking.  This house had a basement suite and the buyer came in and paid cash and is most likely using it as full revenue property.  This is the 2nd house we lost due to another buyer using it as revenue property.  Can you please give us some advice on how a young married couple with a baby on the way is supposed to compete in a market like this?  It tends to be very frustrating and discouraging when the houses in our price range are being scooped up by investors, as there isn’t too many decent houses on the east side for around the $200,000 mark.  We are fully aware and prepared to place an offer over asking, but how can you compete with someone paying cash?

Norm said: Cass, thanks for stopping. Cash sounds pretty impressive but when I’m reviewing offers it only goes so far with me. The seller is not normally very concerned with how the home is being financed.  However, cash offers do often come forward without any conditions attached and the thought of having a good offer completed right now is very attractive to most sellers. One of our sellers just accepted an unconditional offer which was $4,000 lower than the second best. They see some value in knowing that the sold sign goes up right now and that there aren’t going to be issues that have to be sorted out.

Perhaps you could see your mortgage person and tell them that you want to write your next offer without a finance condition. If that person can assure you that you’re good for $225,000 for instance there is probably little risk in eliminating that condition.

Request and review the Property Condition Disclosure up front. It’s always a good idea to ask your agent to “incorporate” the disclosure but if you view the statement prior to writing, you don’t need to include it as a condition.

The biggest gamble is the home inspection. Do you have the guts to write an offer that is not subject to an inspection?  It’s a tough call but the truth is that it’s rare that significant problems are found. Most commonly we see busted furnaces, grade issues, and other items which are relatively easy fixes. I don’t ever feel good about suggesting a buyer not have a property inspected, but the fact is this one is always a big concern for sellers, even those who are confident in their property. Do you have someone who could help you do a cursory inspection of a property prior to writing an offer? If you can’t get around this gamble, you might consider writing the home inspection condition in a different way which would allow you to back out if major problems are discovered but also provides the seller with assurance that you aren’t going to nickel and dime. “This offer is subject to a professional inspection of the property to determine structural integrity of the improvements. The buyer agrees that they shall have no right to rescind this offer for discovery of defects which do not exceed (insert amount here) in repair costs.”

Conditions like “satisfactory gas line inspection” or “review of local bylaws,” etc are bound to doom your offer. Do your homework in advance.

Scrape together as much money as you can for a deposit and show the seller your good faith. A $10,000 is a strong sign and it’s totally appropriate in this market.

Try writing the seller a personal note to include with your offer. Let them know who you are and how much you love their home. Tell them that you are very confident in the house (if you are) and how much you look forward to raising your family there. Ask them, “Is there anything else which we can do to have you favour our offer? We are open to discussing ways in which we can come to agreement. We really want to make your house our family’s home. We are available at a moment’s notice to address any concerns which you may have.”  Place the note in an envelope with the seller’s name on it and enclose it with the offer in another envelope.  Have your agent deliver it to the house when offers are presented. Go with him. Wait outside in the car. Be sure that the seller’s agent knows you are there; ready to deal with issues which concern the seller.

All other things being equal, most sellers would prefer to see their home go to a family instead of an investor. Try to use that to your advantage by giving the seller a little insight into who you are.

Good luck.  I really hope you get the next one.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Free wireless hot spots coming soon to Saskatoon

Free wireless hot spots coming soon to Saskatoon

The Calvert government announced another election year carrot yesterday unveiling its plan to create the “largest free wireless Internet network in Canada.” The province will invest approximately $1.3 million dollars to install wireless transmitters in various “hot spots” through Saskatoon, Regina, Moose Jaw and Prince Albert. They’ll also foot the bill for the service costs which are estimated to be around $340,000 a year. The “Saskatchewan Connected” initiative should be up and running by May of this year.

Saskatoon residents can expect free wireless service in a number of locations including the downtown Saskatoon area, the University of Saskatchewan, SIAST and the Broadway business district. There is some possibility that wireless zones may be expanded in the future.

At the announcement Premier Calvert said, “We need to keep Saskatchewan in the forefront…of information technology” and added that the initiative will “contribute significantly to the progressive image of our communities.”

Andrew Thomson, the minister responsible for information technology suggested that you may not want to move too quickly in dumping your current Internet service provider. He promised that the service would be superior to dial-up, but it won’t meet high-speed specifications. Secure transactions are not recommended. Porn and gambling sites will not be accessible.

Personally, I think it’s long overdue and a pretty cool move but I expect that the Calvert government’s hope that it will “attract and retain” young people in the province is a bit of a stretch.

What is up with those Saskatoon condo prices?

Saskatoon condo prices rise

What is up with the Saskatoon condo market? One and two bedroom apartment style condos have been flying off of the market at an unbelievable rate. The price change is almost mind boggling for a market that has become accustomed to annual price increases limited to the 4%-7% range.

I met with a young guy on January 9. He’s finishing his final year at the University of Saskatchewan and will soon be ready to sell his condo which is located on the east-side. It’s a 2 bedroom unit of approximately 700 square feet. Back in January, we were discussing a list price of around $85,900 but at the time he was at least two months away from listing the home. He emailed me yesterday wondering what has been happening in the condo market and he asked if there has been any change in the value of his home. I responded by telling him I felt pretty confident that we could market it at $110,000 today. He promptly emailed me back for a head check. “Let’s make sure we’re on the same page here Norm. I’m the guy…$85,900.”

Well, here’s a little recent history on what’s been happening in the condo market.

On January 9, I helped a young woman purchase a two bedroom condo at Shorebird Watch for $91,500. The following day, the price on those units went up to $96,500. A number of price increases were implemented over the next few weeks. By February 6 the price for these homes had reached $107,900. The last of those condos have been sold. On the morning of February 4, I listed a small condo on Kingsmere Boulevard for $102,900, which at the time was competitive with the Shorebird Watch prices. After doing a little pre-promotion we went to the market on the morning of the 6th, showed the unit 23 times (that day) and by the end of a long day, my seller and I were reviewing a stack of offers. The winning bid was $113,000. Last week, my good friend Sean Wilson (as good a friend as one can be given the fact that we’ve never actually met in person) from Remax listed a 755 square foot condo on Wollaston Crescent for $114,900 and while there are still some conditions on the agreement which prevent the price from being published, I’m confident that it likely sold for the asking price, if not above. Wow!

Take a look at the Pine Creek town homes (no longer available). At the beginning of the year, you could purchase one of the base entry level units for $144,400. Those same homes are selling today at $199,400, a thirty eight percent increase in just two months time.

These particular homes all provide a pretty good overview of what’s going on in the Saskatoon real estate market. When you have what are essentially the same units selling repeatedly at progressively higher prices you can’t help but feel like you’re in Calgary or Edmonton.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Who is your real estate agent looking out for?

Who is your saskatoon real estate agent looking out for

If you’ve visited my blog before, chances are you’ve caught on to the fact that I’m very concerned about a practice which is occurring regularly which I believe is deceptive and hurtful to both buyers and sellers. It goes like this; the agent lists the seller’s property and promises to give the home full exposure to the market including all kinds of advertising and more importantly, MLS® service. He then does whatever he can to hide the listing from the market while he makes his best effort to sell the property himself, hoping to pocket the entire commission. Perhaps he lets a few of his best buds from the office in on the game, but for the most part he tries not to let anyone know it’s for sale unless he or someone else from his office has the chance to show it to the buyer.

Why should you care? Well, if you’re a home buyer it robs you of the opportunity to see and consider homes which were supposed to be listed MLS®. It limits your options. If you’re a seller, you should care because these practices are almost certainly going to cost you money; lots of money. Every agent knows that there is a pretty direct relationship between the number of prospective buyers for your home and the price at which your home will sell. If an agent pulls this trick on you, he has no shame. He is a deceptive, selfish person who thinks nothing of stealing from you. He certainly has no regard for the fiduciary duty which he owes to you as your agent.

At first, I was reluctant to bring it up. Now, I’m like a raving lunatic who can’t be stopped until this evil practice is dead. J Please forgive my rambling but I do take this business very seriously.

I did a little research today on Saskatoon and area real estate sales dating back to February 15.

Here’s what I found.

  • A seller is more than twice as likely to receive an offer which is above the list price if the buyer is represented by another real estate company (or brand). Last week the average overbid exceeded $6,000 and we’ve seen offers as high as 15% over list price in the past few weeks. As a home seller, you probably want to maximize the chances that it will happen for you.

  • Where a listing sold for less than the asking price, the average discount was just .4% if the buyer was represented by a different real estate company (or brand). The discount jumped to 2.4% when the same company (or brand) represented both the buyer and the seller. On a $250,000 home, the difference amounts to an additional $5,000.

I believe that this massive disparity is the result of agents who engage in the practice I’ve described. I can’t think of another reasonable explanation and I’m seeing it happen every day.

There is nothing wrong with entertaining offers from buyer who is working with your agent, or your agent’s company. However, if there aren’t any agents from other companies inquiring on your home, you may want to find out if your agent is playing “hide the listing.” We are currently experiencing the hottest real estate market I’ve ever seen. Make sure your agent is helping you take advantage of it, and not robbing you blind.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon real estate: Week in review (February 19-23 2007)

Here’s a brief statistical overview of residential sales as reported to the Saskatoon Real Estate Board MLS® system for the past week.

Notable changes over the previous week:

The percentage of listings which sold at the list price or above the list price increased from 48% to 56%.

The average selling price of a home exceeded the average listing price in four of five areas*.

The average overbid where listings sold over their list price increased 27% from $4,735 to $6,037.

Saskatoon real estate stats

Largest overbids

  • 864 square foot Lakeview condo sells 10% over list at $113,000.
  • 1,000 square foot Dundonald house sells 10% over list at $198,000.
  • 975 square foot City Park house sells 10% over list at $170,000.

See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate