In many Canadian real estate markets the pace is quick and prices can move so quickly that it’s difficult to judge whether a listing is over-priced. If you’re a buyer, there’s a very simple solution—work with a professional real estate representative who knows their local market. While most Canadians begin their home search on the Internet, and by reading the paper or just driving around areas they like to see what signs are posted, these methods don’t give a buyer any indication of what pricing is realistic for that market. What you see is just the tip of the iceberg. You need an expert who has access to literally up-to-the-minute information to help you gauge just where the market is going and how to price an offer that is attractive enough to be accepted, without paying more than you should.
Real estate professionals stay on top of current pricing trends in a variety of ways. Through the realtor’s association database, your realtor will prepare a CMA, or Comparative Market Analysis for you. Real estate agents can review historical data, like what homes have sold for, and perhaps even more importantly, they can see what listings expired without selling. This is an excellent indication of what price the market will not bear at the current time. There are also reports published within the industry that are indicators of what price increases are projected for the upcoming period. An active real estate ‘pro’ will also have an extensive network of other real estate representatives, mortgage lenders and other sources of influence to help them keep their finger on the pulse of the current market.
Without a crystal ball, it’s impossible to predict what I like to call “market motivation." That is, if you are competing in a multiple offer situation on a home you wish to purchase, you never know how motivated the other buyer(s) may be. Have they lost out on 3 other homes and are determined to get this one? Is it right next door to their family home? Do they need a home right away and can’t afford to lose it? This type of buyer may be willing and able to pay more for the house than statistical data shows it could be “worth." Whatever that buyer wants to pay for the home becomes market value for the home at that moment. On the other hand, you could be competing against someone who is not able to pay more for the house, or doesn’t believe it could sell for more. In which case, a good solid offer from you can clinch it with ease.
No matter how you look at it, the best way to ensure you don’t waste your time or your money on an over-priced listing, is by working with a professional. Best of all, as a buyer, this expert advice doesn’t cost you a thing.