Like most realtors in Cambridge, Molly Yetman is witnessing the pain that comes to buyers in a sellers’ market. Every agent she knows has a handful of clients who just can’t seem to land a house. “I have clients who have lost six,” she admits. “It’s not at all unusual for any of us right now. There is a shortage of homes on the market and a backlog of buyers all bidding for the same homes.”
Myth: It’s not just Torontonians.
While we are seeing a lot of Torontonians move this way, the sales representative from Royal LePage Crown Realty explains that they are not necessarily dictating the market value of homes. It comes down to each individual buyer and the situations they have been in and the number of homes they have lost. For the most part, when a buyer first begins looking in this market, it is hard for them to offer more than the asking price. Yetman and other Realtors are telling their buyers that the asking price is one thing, but the market value of the home is different.
Once buyers see enough homes and learn what they end up selling for – sometimes $20-30,000 over asking — they begin to understand that the asking price is not what the home’s market value is. By the third or fourth home they have competed on and lost, they will start increasing their offers. So it is not just Toronto buyers coming this way that is causing homes to sell considerably over asking; it is also the shortage of homes on the market, the backlog of buyers that each Realtor has, and the fact that buyers are competing against other buyers that have lost two or three homes already.
Here are some tips from Yetman, for dealing with this hot and highly competitive Cambridge housing market:
Tip One: Go in with your best offer.
Her advice is to go in with your best offer, “because you never know who you’re competing against or what they’ve lost.”
Tip Two: Keep it clean.
No matter how much you like that gazebo or chandelier, don’t ask sellers for things they’re not offering.
Tip Three: Turn it around fast.
If you need a home inspection, make it a fast turnaround.
Tip Four: Up your deposit.
Provide as large a deposit as you can; it shows your sincere intent and just goes right towards your downpayment if you get the house. (If you don’t get the house, you do get the deposit back.)
Tip Five: Leave the closing date blank.
If you can be flexible with your closing date, circle and initial it but leave it blank; let the seller choose the date and fill it in.
Tip Six: Write a letter.
Write a brief letter to accompany your offer to the sellers. A good agent will talk you up, explain why you love the home, and do his or her best for you, but your own words can sometimes swing things your way. “Just be honest and to the point,” Yetman suggests. “Keep it simple. Talk about things like pride of ownership and specifics about their property that draw you to it. Don’t try to tug hard on the heartstrings or make a seller feel guilty.”
As our conversation drew to a close, Yetman had a couple of other provisos for first-time, want-to-be buyers.
Tip Seven: Use the right type of lawyer.
When it comes time to get a lawyer involved, use a real-estate lawyer. Not a family-law lawyer. Not a tax lawyer. A real-estate lawyer. You need someone who understands all of the ins and outs. Go with a specialist. If you don’t know one, your realtor can refer you to one.
Tip Eight: Firm up your insurance early.
Know your insurer. Be very clear on what the company will or will not insure (some companies won’t insure knob-and-tube wiring, for instance). Often you can get a quote over the phone, but with older homes, you probably want your agent to come through it so you don’t get hit with any unpleasant surprises on closing day.