Competing Offers
In certain market conditions (like the Georgetown Area Market in Spring 2010), consumers may find that more than one buyer is interested in a property. This is a competing offer situation and creates unique conditions in a real estate transaction. Both sellers and buyers need to consider how to respond when presented with a competing offer situation. Working closely with your real estate broker or salesperson will ensure that you understand the process.
In Ontario, the seller's real estate broker or salesperson is required to disclose the number of competing offers to all buyers who have submitted a written offer. However, the terms and conditions of each offer are confidential to the seller and their broker or salesperson.
Working with a Real Estate Broker or Salesperson
The seller's real estate broker or salesperson represents the interests of the seller in the transaction. The decisions about how offers are presented and responded to, as well as which offer is accepted, are made by the seller.
The buyer's real estate broker or salesperson represents the interests of the buyer in the transaction. The buyer makes the final decisions related to their offer, including the important decision of whether or not they want to participate in a competing offer situation.
In some situations, the real estate broker or salesperson will represent the interests of both seller and buyer or multiple buyers. Consumers should seek guidance from their real estate broker or salesperson if this situation arises.
Tips for Buyers
In a competing offer situation, buyers may be tempted to offer more for the property than they planned to and/or remove conditions from offers that are intended to protect them.
Before participating in a competing offer situation, buyers should consider factors such as:
Offer Price
How much can the buyer afford to offer for the property and how much is the property worth? A high offer could enhance the buyer's chance of success. However, it may not be the best long-term financial decision for the buyer. A competing offer situation does not necessarily mean that a property will sell for more than the asking price. Similarly, an offer that meets or exceeds the asking price will not guarantee that a buyer's offer is accepted.
Financing
Buyers should be aware that pre-qualifying for a mortgage does not safely eliminate the need for a financing condition in an offer.
Home Inspection
In competing offer situations, it can be tempting not to include a clause in an offer that makes it conditional on a home inspection. While your offer might be more acceptable to the seller, you may later learn that there are property defects, required repairs or needed upgrades that you weren't aware of. In some cases, this can be expensive in the short or long-term. Foregoing a home inspection is a significant risk that a buyer needs to carefully consider.
Tips for Sellers
A seller facing competing offers has to consider how they want to deal with the situation. The seller can decide to: accept the best offer; negotiate with one buyer and reject all other offers; negotiate with one buyer and advise other buyers that their offers are being set aside while the seller negotiates; or reject all offers.
Even in a competing offer situation, buyers have other options and may choose not to continue to participate. A seller may attempt to negotiate only to find out that it was the best offer the buyer could present. In the meantime, other buyers have found new properties they are interested in.
The seller's real estate broker or salesperson can provide advice and guidance, ensuring that the obligations and the options available are understood.
Note: Information provided courtesy of the Real Estate Concil of Ontario (RECO).
More useful information is available at http://CallDerek.ca
CallDerek.ca
Georgetown Ontario Real Estate. Derek Dunphy, REALTOR®
Saturday, April 24, 2010
Sunday, March 21, 2010
Thursday, March 18, 2010
ATTN: Variable Rate Mortgagors... It may be time to lock in!
Attention Georgetown Ontario Real Estate Blog followers:
There seems to be a lot of speculation about interest rates and where they are going over the last few weeks... If you are currently on a variable rate mortgage, I would strongly consider calling your mortgage advisor and asking them about their opinion on locking-in today!
As always, I suggest you call a mortgage broker to get the most competitive rate available (even if you take that rate to your bank and ask them to match)! This morning the lowest posted rate available for a 5-year fixed mortgage was 3.94%; and at least one mortgage broker has advertised 3.69%. For the most current rates available, see the "Mortgage Information" section of my website: CLICK HERE to go to my website!.
There seems to be a lot of speculation about interest rates and where they are going over the last few weeks... If you are currently on a variable rate mortgage, I would strongly consider calling your mortgage advisor and asking them about their opinion on locking-in today!
As always, I suggest you call a mortgage broker to get the most competitive rate available (even if you take that rate to your bank and ask them to match)! This morning the lowest posted rate available for a 5-year fixed mortgage was 3.94%; and at least one mortgage broker has advertised 3.69%. For the most current rates available, see the "Mortgage Information" section of my website: CLICK HERE to go to my website!.
Tuesday, March 9, 2010
Spring 2010 Newsletter
Written by me, for you... My Spring 2010 Newsletter is now online. Enjoy!
Spring 2010 Newsletter - CLICK HERE
Comments and Questions are appreciated.
Spring 2010 Newsletter - CLICK HERE
Comments and Questions are appreciated.
Saturday, February 27, 2010
Bank of Canada Urged to bump up rates...
Nonpartisan public policy think tank organization J.D.Howe Institute issued a press release this week from their Monetary Policy Council.
The policy group is largely made up of economist academics and bankers; who all recommended that interest rates should start to rise sharply, starting in July of this year. Where the rate will end up is a decision the Federal Government and the Bank of Canada will have to make; but if the council has it's way, we will see an increase of 50 basis points in July (from .25% to .75%), and further increases every few months until mid-2011, to a target rate of 2%.
Once again, if you are interested in buying a home this year - I advise you to strongly consider buying before July! Avoid the increased closing costs that will come with the HST implemenation, and avoid the risk of increased interest rates (which are almost certainly coming as well).
The policy group is largely made up of economist academics and bankers; who all recommended that interest rates should start to rise sharply, starting in July of this year. Where the rate will end up is a decision the Federal Government and the Bank of Canada will have to make; but if the council has it's way, we will see an increase of 50 basis points in July (from .25% to .75%), and further increases every few months until mid-2011, to a target rate of 2%.
Once again, if you are interested in buying a home this year - I advise you to strongly consider buying before July! Avoid the increased closing costs that will come with the HST implemenation, and avoid the risk of increased interest rates (which are almost certainly coming as well).
Saturday, February 20, 2010
Cautious Steps Taken to Prevent a Housing Bubble... As predicted!
"We're taking proactive, prudent, measured, and cautious steps today - to help prevent a housing bubble"; these were the words spoken by Jim Flaherty, Canadian Finance Minister on February 16th, 2010 - words many expected to hear (including this very BLOG at the end of 2009). The steps however were less far-reaching than many anticipated.
The goals of the Finance Minister were to help slow down rapidly rising housing prices across the country, and to help prevent the subprime crash our American neighbours experienced in 2008. Following the minister's comments, the banks weighed in - and in interviews given by Patricia Croft, RBC Chief Economist, and Derek Holt, VP Economics at Scotia Capital, both seemed to agree that the government's move was a good one (although Ms.Croft believed it came about 6 months too late). While sceptics (and many pure capitalists) argued that the government should leave the business of policy setting to the private industry; Derek Dunphy REALTOR from Johnson Associates Real Estate Ltd., Brokerage believes that the government should play a role in ensuring that Canadians can obtain affordable home ownership.
So, what were the steps taken? In broad terms, the steps were all subtle changes to the Canadian Mortgage and Housing Corporation (CMHC) policies:
1. Mortgage applicants will minimally need to qualify for a five-year fixed rate mortgage (even if they end up choosing a lower term or variable rate mortgage).
2. When refinancing a mortgage, the amount Canadians can withdraw from the equity of their home has been lowered to 90% (from the current rate of 95%).
3. A 20% down payment will be required for non-owner-occupied properties. Meaning investors will not qualify for high-ratio mortgages.
The immediate impact will be felt by many first-time buyers who will need an estimated $9200 more a year in income to qualify for an average priced house in the Greater Toronto Area (based on a house costing $337,000).
These changes come into effect April 19, 2010 - and that will likely cause some short term stimulation to sales, perhaps causing buyers that were planning late spring and summer purchases to act sooner.
Does your REALTOR understand the evolving market? If you are planning on buying or selling real estate in the Georgetown Ontario area (or anywhere else in the GTA), call Derek Dunphy, Salesperson with Johnson Associates Real Estate Ltd., Brokerage at (905)877-8233, or email Derek@CallDerek.ca. Derek's website can be viewed at http://callderek.ca/.
The goals of the Finance Minister were to help slow down rapidly rising housing prices across the country, and to help prevent the subprime crash our American neighbours experienced in 2008. Following the minister's comments, the banks weighed in - and in interviews given by Patricia Croft, RBC Chief Economist, and Derek Holt, VP Economics at Scotia Capital, both seemed to agree that the government's move was a good one (although Ms.Croft believed it came about 6 months too late). While sceptics (and many pure capitalists) argued that the government should leave the business of policy setting to the private industry; Derek Dunphy REALTOR from Johnson Associates Real Estate Ltd., Brokerage believes that the government should play a role in ensuring that Canadians can obtain affordable home ownership.
So, what were the steps taken? In broad terms, the steps were all subtle changes to the Canadian Mortgage and Housing Corporation (CMHC) policies:
1. Mortgage applicants will minimally need to qualify for a five-year fixed rate mortgage (even if they end up choosing a lower term or variable rate mortgage).
2. When refinancing a mortgage, the amount Canadians can withdraw from the equity of their home has been lowered to 90% (from the current rate of 95%).
3. A 20% down payment will be required for non-owner-occupied properties. Meaning investors will not qualify for high-ratio mortgages.
The immediate impact will be felt by many first-time buyers who will need an estimated $9200 more a year in income to qualify for an average priced house in the Greater Toronto Area (based on a house costing $337,000).
These changes come into effect April 19, 2010 - and that will likely cause some short term stimulation to sales, perhaps causing buyers that were planning late spring and summer purchases to act sooner.
Does your REALTOR understand the evolving market? If you are planning on buying or selling real estate in the Georgetown Ontario area (or anywhere else in the GTA), call Derek Dunphy, Salesperson with Johnson Associates Real Estate Ltd., Brokerage at (905)877-8233, or email Derek@CallDerek.ca. Derek's website can be viewed at http://callderek.ca/.
Tuesday, February 9, 2010
Strong January Real Estate Sales in the Greater Toronto Area
The real estate market, as expected and predicted right here on this BLOG is really starting to heat-up!
According to the Toronto Real Estate Board, whose SRATUS MLS system covers the entire Greater Toronto Area, recording a strong sales month in January. The statistics can be seen by visiting the CallDerek.ca website: January 2010 MarketWatch Report at CallDerek.ca
It's worth noting that the Johnson Associates Real Estate Ltd., Brokerage office recorded January sales that were roughly double January of last year. Once again outperforming all other offices in Georgetown Ontario.
To sell your home quickly and profitably contact Derek Dunphy, Sales Reprentative at Johnson Associates Real Estate Ltd., Brokerage: Derek@CallDerek.ca
According to the Toronto Real Estate Board, whose SRATUS MLS system covers the entire Greater Toronto Area, recording a strong sales month in January. The statistics can be seen by visiting the CallDerek.ca website: January 2010 MarketWatch Report at CallDerek.ca
It's worth noting that the Johnson Associates Real Estate Ltd., Brokerage office recorded January sales that were roughly double January of last year. Once again outperforming all other offices in Georgetown Ontario.
To sell your home quickly and profitably contact Derek Dunphy, Sales Reprentative at Johnson Associates Real Estate Ltd., Brokerage: Derek@CallDerek.ca
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