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  1. #11
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    How about these bidding wars with offers over asking? Seems to go against what mukhang is saying. I had no idea i might be obligated to sell or pay a commission. The commission is up to 2.5% so i could could offer nothing?


  2. #12
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    Quote Originally Posted by markomark View Post
    How about these bidding wars with offers over asking? Seems to go against what mukhang is saying. I had no idea i might be obligated to sell or pay a commission. The commission is up to 2.5% so i could could offer nothing?
    Bidding wars are often the product of a carefully-orchestrated event between the vendor and the vendor's agent. I know one Vancouver realtor who counsels vendors in the art of creating a bidding war. Typically, the property will be listed a bit below what is seen to be the market, thus attracting interest. The agent will hold open houses on Saturday and Sunday, telling interested parties that offers will be taken on the following Monday or Tuesday. That gives potential offerors time to consider financing and other considerations, increasing the prospect of receiving subject-free offers. In general, in the bidding war scenarios, the agent sees little chance that no sale will occur and no commission will be earned.

    You can be sure that in a slow market, with the property priced at or slightly above market, an agent is not going to stand by, saying nothing, while the vendor rejects full-price offers.

    Most important to the agent's right to a commission is what was agreed in the listing agreement. It should set out clearly what conditions must be met for the agent to be entitled to a commission. You might have a listing agreement that says you are within your rights to be whimsical, mercurial and are only liable to pay a commission if and when you bloody well feel like it.
    Last edited by Mukhang pera; 2017-06-18 at 02:16 PM.

  3. #13
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    Bidding war days are over. Buyers are trying to get out of signed contracts now. Lawsuits are keeping lawyers busy.
    Someone planted a tree a long time ago so I can sit in the shade.

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  5. #14
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    The issue is that this is a custom home, i took out part of the ceiling on the 2nd floor which makes the actually sq foot low hence the low valuation. I think that if someone likes this architectural feature they need to pay for it as if it was usable sq. footage; it shouldn't be like a defect. Besides, for a couple the space is perfect. So that is my problem is that i am cutting my nose for the many unique features that someone should be paying more for not less. That's why i think there might be a bidding war because when you have something that nobody else does people pay more. It is not my fault valuations are based on sq footage not cubic square feet.
    Last edited by markomark; 2017-06-18 at 03:40 PM.

  6. #15
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    Quote Originally Posted by sags View Post
    Bidding war days are over. Buyers are trying to get out of signed contracts now. Lawsuits are keeping lawyers busy.
    I no longer live in Vancouver or Toronto, but I suspect you are right. As I was suggesting to marko, a vendor's agent might be willing to let a full price offer go by and not claim a commission when other offers at least that good, and soon to be at hand, are a virtual certainty. But when the wind starts to shift and there's a risk of avarice resulting in no sale, I would not expect my agent to be assuming an "easy come, easy go" attitude and waive commission entitlement.

    Also, as you say, a felicitous time to be a real estate barrister. The real estate bar can eat quite well off both rising and declining markets. I recall in Vancouver in the early 80s, vendors signing sale contracts to close 90 or 120 days later. By that time the market value would have gone gone up 20%, so the bar was kept busy with specific performance and/or damages lawsuits brought by purchasers against vendors who were less thrilled to be conveying at what had become a fire sale price. Then, a couple of years later, with a 22.75% prime, real estate prices were going down as fast as they went up, so that come closing day 90 or 120 days out, it was hardly surprising that purchasers were just a tad reluctant to have to complete a purchase, knowing that they were now paying 20% too much in a still-declining market. So by that time, it was the vendors who were the ones commencing the lawsuits, seeking to force recalcitrant purchasers to stick to their improvident bargains. All good clean fun for the lawyers. Reminiscent of the bank advertising way back (B of M perhaps?) with the slogan "When you succeed, we succeed." What was unspoken was the corollary "When you go belly up, we still succeed."

  7. #16
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    Quote Originally Posted by markomark View Post
    The issue is that this is a custom home, i took out part of the ceiling on the 2nd floor which makes the actually sq foot low hence the low valuation. I think that if someone likes this architectural feature they need to pay for it as if it was usable sq. footage; it shouldn't be like a defect. Besides, for a couple the space is perfect. So that is my problem is that i am cutting my nose for the many unique features that someone should be paying more for not less. That's why i think there might be a bidding war because when you have something that nobody else does people pay more. It is not my fault valuations are based on sq footage not cubic square feet.
    Maybe. What is one person's view of a jewel is another person's view of NFW. The more unique a house, the smaller is the target market and you may have dimished your pool from 100 potential buyers to 1 potential buyer (exaggerating to make a point). I've bought and sold many houses over the years. Mainstream (boring?) configurations and building style have a larger target audience, and uniqueness may not be at all recoverable in a sale. Things like paint, kitchan and bathroom renos have the most return on resale. Most other things not so much (or even detract from a sale).

    Added: Some people will really like 9 ft ceilings while others prefer square footage. It is simply that simple.

  8. #17
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    I was talking with my realtor, he told me that often the first offer is the best offer. While you can sometimes hold off for something better, many times the offers come in lower later on. His thinking behind that is, first you piss off the original buyer, so they won't offer again and next, as it's been sitting on the market a long time, the buyers want more of a deal.

    Since I don't tend to sell properties often, I really don't know, but I know if I make an offer at list and it gets rejected, I'd be pissed.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  9. #18
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    Quote Originally Posted by Just a Guy View Post
    I was talking with my realtor, he told me that often the first offer is the best offer.
    I think that to be a bit of lore taught at Real Estate University since time out of mind.

    The first house I ever sold was a triplex in Kitsilano, in Vancouver. The agent came and walked through it and said he'd he happy to list a little over $100,000, maybe as high as $105,000. Then he said "or we could list at $99,000 and stick pretty close to it." So, I opted for that route and signed the exclusive listing. Five days later, he comes in with an offer at $95,000. I asked, what about sticking to $99,000? He came back with the classic "first offer is often the best offer". Well, in my early 20s I was pretty green and suggestible, so I took it. The agent made a quick $4,750 without ever getting around to placing a first ad in the West Side Real Estate Weekly. At least I made the right move in not agreeing to the full meal deal with an MLS listing, which would have set me back 7% commission on the first 100k instead of 5%, for a total of $6,650 on a sale of $95,000. I was a university student back then and $6,650 represented a good chunk of my annual budget.

  10. #19
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    My house in Toronto is currently listed.
    Unfortunately I was a little slow getting to market, and listed right in the middle of Kathleen Wynne's re-election campaign (aka 16 new housing measures to buy votes).
    Got a handful of offers on offer night, ranging from 6% above ask to 25% above ask. In the weeks prior, houses were going for 50-60% above ask - it was madness and I was hoping to capitalize. I've got time on my side, so decided to wait it out.
    Unless you have signed a contract saying otherwise, there is nothing that forces you to sell just because an offer comes in at your asking price.

    Since the original offer night, I've had a number of offers, each progressively higher than the initial highest bid on offer night.

    I definitely missed the big rush, but there is still demand out there, and the market is looking for equilibrium at the moment

  11. #20
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    Quote Originally Posted by Just a Guy View Post
    I was talking with my realtor, he told me that often the first offer is the best offer. While you can sometimes hold off for something better, many times the offers come in lower later on. His thinking behind that is, first you piss off the original buyer, so they won't offer again and next, as it's been sitting on the market a long time, the buyers want more of a deal.

    Since I don't tend to sell properties often, I really don't know, but I know if I make an offer at list and it gets rejected, I'd be pissed.
    I have sold a number of houses over the course of my career (corporate transfers and all that). I would not go so far as to say the first offer is likely the best offer, especially if not at list. I've had offers below list and countered back to list, or $1000 below list. I've sold a few that way. But it is good to not let the listing go stale.

    What can happen is that after the first few weeks, realtors (and potential buyers) start thinking the homeowner is more willing to negotiate downwards from list and the offers, if any, start to decrease (but not always). Sometimes it just takes the right buyer. But a listing that gets to be 30-60 days old is almost 'dead in the water'. Potential buyers and realtors start to think there is either something wrong with the property or the homeowner is in denial about what the property is really worth.... at least that is the case in bigger urban centres. Less of an issue I think in smaller places where there is not much turnover, listings or potential buyers. Sometimes it will be best to take a 'stale' listing off the market if the homeowner can do so, and re-list several months later. BUT overall, my experience is the best opportunity for the best prices are within the first 2-3 weeks of listing.

    Added: Except maybe in really stupid markets like TO and Vancouver.

    Last edited by AltaRed; 2017-06-18 at 06:33 PM.

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