HOT, HOT, HOT! That’s the best way to describe the Seller’s market in the London area these days. With homes selling sometimes $150,000 (or more) over list price, buyers are beginning to wonder what on earth does the list price mean anyways.
“Why are listing agents pricing the property so low in the first place?” is a common question I am getting from my Buyers.
When I am listing a property, I look at recent sales of comparable properties to help me assign ‘market value’ or what I think the ‘sale price’ will be. This task is becoming harder and harder because of the drastic price increases we have seen over the last year and in particular since the beginning of 2021. The market has been increasing almost on a weekly business.
Because we don’t want to leave any ‘money on the table’, it is in the best interest of my sellers if we use, as our list price, an ‘unapologetic’ price for the property. In other words, a price that we know for sure the property is worth. Then we expose the home to the market for a few days and accept offers on a specified offer date, letting the buyers drive the sale price. With so many buyers and a relatively small amount of inventory, almost all properties are selling in a ‘bidding war’ and over list price.
“How do I know how much to bid over list price in order to ‘win’ the bidding war?” This is another common question I get from buyers. Unfortunately, there is no set formula for this. However, if you know the following three things it will be very helpful.
- How many buyers are putting in an offer on the property? The listing agent must supply all buyers with this information.
- What was the recent sale price of a similar property? Your buyer agent will be able to look up the recent comparable sales for you.
- How much has the market gone up since the last few comparable sales? Once again, your buyer agent will have access to these numbers.
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Now you have an idea what the property might sell for and you place your bid. But if you want to be the top bid you might just might want to add a few extra dollars. The final offer price is a decision the buyer will have to make, taking into consideration how badly he or she wants that particular property. Yes, buying a property these days is not for the faint of heart, especially if you are looking at properties under $650,000. This lower price point is very, very competitive. My advice is to work with a good buyer agent, get pre-approved and be ready to go out and see new listings as soon as they come on the market. You may also have to be ready to make some concessions on the type of property you are going to purchase. The rewards of home ownership are great, so don’t give up!
For further information about how to be a successful buyer in today’s market,
please feel free to reach out to me directly.
natalie@nataliefrench.ca
519-636-7827
