If you haven’t heard, Hamilton’s Real Estate market is on FIRE! There is a strategy of under pricing properties to create an even more frantic bidding war. What are the pitfalls of under-pricing your property in a market like Hamilton is experiencing now?
Properties are selling for over asking price even if they are priced “bang on” or at least what we perceive to be “bang on”. So if the property is under-priced as well, there is a strong possibility that the difference between asking and selling price will be quite large. At what point does this trigger red flags and an appraisal from the lender or the insurer? That is the million dollar question. It depends on the location and the perceived risk that the area poses to the lender or insurer. I’m sure there is a formula so that when the details are input into the lender’s system, it can either go through without a hitch or trigger that appraisal.
So what if an appraisal is called and the property does not appraise at the value it sold for? If there is a condition on financing the buyer could walk away from the transaction. In this case at least you would know within the time allowed for that condition. Usually 3-7 days. What if the buyer came in without a finance condition because they were in competition and “really wanted the house”? Here is where is gets tricky. The Buyer needs to understand that if the property does not appraise at the sold value, they will have to come up with their down-payment as well as bridge the difference between the appraised price and the sold price. This can be quite significant.
There may be a temptation to accept offers without a financing condition but I would want to be assured that the Buyer is of course pre-qualified, can come up with extra cash if there is a shortfall with the appraisal and has been advised that this is a possibility. Some times it is better to deal with a short finance condition and make sure you know what to expect as opposed to getting a surprise down the road when you find out the Buyers have been unable to procure financing. Make sure you and/or your agent ask the questions that need to be answered to protect you.
In my opinion, do not under-price your property to create a crazy bidding war. Price it right, with a good chance of still creating that bidding war. Without sending up RED FLAGS to the lender because you have a sale price that is way higher than the asking price.
If you have any questions about this or want other Real Estate and Hamilton area information, contact me at 905-574-4600 or email email@example.com
Expect More, Get More!
There an incredible imbalance of buyers and sellers. A huge shortage of homes for sale in Hamilton and area. It is What has caused this PERFECT STORM?
There is the pent-up demand from the Buyers who were taken out of the market due to mortgage rule changes in 2012. Many are coming back into the market now.
There is a huge migration of buyers from the GTA due primarily to affordability. Also the fact that there are more commuting options now and even more in the near future. The construction of a new GO Station with “all day” GO service sure to be a reality in the near future.
Incredible mortgage rates further drive and assist the Buyers make their homeownership dreams come true.
Hamilton reinventing itself with a diversified economy and changing job market. No longer the Steel industry as the primary employer but instead everything to do with the Medical Field, education, research and the world class hospitals. A booming and changing demographic with a thriving grassroots Arts/Music/Theatre Community. Hamilton is no longer a secret and is on the map for many reasons. A mecca for the outdoor enthusiasts with greenspace, waterfalls, beach front, harbour and amazingly located between a Great Lake and an Escarpment. Then of course, the people, recognized as a very generous and caring community.
Move up Buyers who are nervous about putting their homes on the market in case they can find anything or who are waiting for the “spring market” to list their homes.
The pressure comes from the bottom, from the First Time Buyers. Hopefully the “Spring Market” will bring more product on the market to help alleviate some of this pressure. After all a little more balance is always healthier for everyone.
My best advice….If you are a Seller, LIST your home now and beat the rush of Sellers. If you are a Buyer without the pressure of time. Breathe for a few weeks and hopefully you will have more product to pick from soon.
Next I will address the so called benefits and pitfalls of under pricing your home in this type of market.
Visit www.HamiltonRealEstateSales.com for more Hamilton and Real Estate information.
When you are purchasing a home it would seem that “what is the difference between a fixture and a chattel?” should be an easy answer. Well not always, sometimes there is confusion or the wrong expectations.
First lets differentiate the meaning and use. A fixture is “a-fixed” to the house and is deemed to stay with the house unless it is excluded from the Agreement of Purchase and Sale. A chattel is not “a-fixed” to the home and goes unless it is included in the Agreement of Purchase and Sale.
Some items are clear and sometimes we put them into the offer anyways for clarity and to make sure everyone understand what stays and what goes.
A prime example of something causing confusion in the last few years is bathroom mirrors. It used to be clear that the “medicine cabinet” would stay. Now, with more decorative framed mirrors that may just be hung on a nail like a picture, it’s not so clear. The Buyer has an expectation that they will have a mirror in their bathroom on closing. The Seller says, I paid a lot for that and it’s not “fixed” therefore not a fixture. For clarity I always included “any bathroom mirrors” in the agreements I prepare.
The built-in dishwasher is “a-fixed” by plumbing but since it is an appliance most Realtors® would include it in the “Chattels” section to ensure clarity. Decorative curtain rod could be just laying on hardware. So does that mean the rod can go and the hardware bolted to the wall must stay? What about wall shelves that are held on a screw much like a painting can be? What about the bookcase that has been secured to the wall to prevent tipping?
Not always so clear is it?
If you’re not sure, it’s best to include or exclude in the appropriate areas to make certain everyone has the same expectation.
Helping you through the process.
Expect More, Get More!
Visit http://www.HamiltonRealEstateSales.com for more Real Estate information.
Clients often ask me, “what’s elf’s?” Well in the Real Estate world it is not Santa’s little helper but an acronym for Electrical Light Fixture. Unfortunately, there is a lot of information to give and a limited number of characters allowed. We need room for those descriptive words to paint a picture for you, the buying public.
RSA – Room sizes approximate
Reno’d – Renovated
SPIS – Seller Property Information Statement (this requires a whole blog on its own, ask me about it)
F/P – Fireplace
B/I – Built-in
pc – piece as in bathrooms
SS – Stainless Steel
W/ – With
Sep – Separate
cvac – Central vacuum
TLC – Tender Loving Care
Base – Basement
Prof – Professionally
Hrdwd – Hardwood
GDO – Garage door opener
Let me help you interpret the jargon. There is a lot said in the remarks of a listing by what is not said and the choice of words used. Maybe my next blog should be on how to interpret what is not said in a listing remarks section. Stay tuned.
Contact me with any questions you have or for any assistance with your Real Estate needs.
EXPECT MORE, GET MORE!
As promised here is some advice on buying a home in Hamilton during this incredible booming market.
First find a Realtor® you trust and feel comfortable with and sign a Buyer Representation Agreement. Make sure someone is actively searching for you and is “on it”. If you attempt to search yourself, you will always be a step behind. It’s tough for us and we get the information the instant it is uploaded to our Association.
Second, set your search up slightly below where you qualify in this market. Normally we would search just above where you qualify knowing that the homes will sell slightly below asking. However, in this market in Hamilton it has become “normal” to sell over asking so this gives you some wiggle room to offer over asking if you are not looking at your max.
Third, don’t be afraid of competition. Look at the comparable sold properties with your agent and decide what you feel the house is worth. There are some who strategically under price their listings so don’t get too caught up on the listing price. What is the value? More importantly, what is the value to you? Does it meet your needs? What are your short and long-term goals related to real estate? What about the area. Are there any external factors that affect the value beyond the regular increase in the market? What is happening there?
What is the magic number in competition? That is always changing and is different in every scenario. A question I would ask you after looking at the comparable properties that are similar and have recently sold is; What is the number that you will be okay with if you lose by a little and if you win, you won’t feel you overpaid? That is the magic number because it’s the one you will be comfortable with win or lose.
I know it is extremely frustrating but this is happening because you are in the hottest market in Canada and there is no sign of that changing. Hamilton is an excellent place to buy and a great investment.
Lastly, don’t let you emotions get the best of you. Find a Realtor® you trust and have faith. It is a difficult process but a worthwhile one and the rewards can be fantastic!
Initial reaction, awesome! Not so if you are a prospective buyer trying to purchase Real Estate in Hamilton. Hamilton’s market is booming due to affordability. We’re just trying to catch up. We are seeing a huge influx of buyers from the GTA. Then of course there is our diversification, growing grassroots arts and music community, loads of green space, trails and waterfalls, improved commuting options and just the fact that we are getting on the map. The best kept secret is no more, the word is out. A strong commitment by city and developers to urban revitalization. Hamilton is a fabulous place to live, work, learn and play and a great place to raise a family. A great place to invest with no sign of slowing down. Continue reading Hamilton, Ontario | Hottest Real Estate Market in Canada
Wondering What to Do in Hamilton This March Break. Let Me Help!
Hamilton, Ontario or #HamOnt and AKA The Hammer is a wonderful city to Live, Work, Learn and Play. With a growing and vibrant arts, music and theatre scene. We are still flying high from hosting the Juno Awards this past weekend. What a success JunoFest was especially with the overlap of Hamilton’s own ArtCrawl, a monthly event in the core highlighting the arts. Then of course the crown jewel, “Supercrawl”, host to over 80,000 people every September. Art Crawl and Super Crawl are FREE events.
Boosting being the Waterfall Capital of the World, with loads of green space and conservation lands, walking and biking trails and waterfront. What more could you possibly want? If shopping and eating out is your thing, visit and James Street north shopping district, Concession Street shopping district and Locke Street shopping district to name a few.
Are you interested in learning more about Hamilton? Visit my website and contact me.
Here are some links to events in Hamilton over March Break.