If you’re a resident of Guelph, you can be forgiven for thinking the local real estate market has gone crazy.
In recent weeks house prices have rocketed skywards, people are offering way over asking and multiple offers are becoming more common. Can the market support this? What is actually going on and why has the market reacted this way?
What’s particularly confounding is that some homes are selling for regular market value, such as those in the West Acres neighbourhood. Others, however, are selling for astronomical prices, such as those in Bishop Court, Carrington Place and Uplands Place, to name just a few.
While it’s every seller’s dream to be able to get top dollar for their home, the thrill can’t just be on paper—the deal needs to actually close. The goal is the successful transfer of title on the completion date.
Local real estate agent Andra Arnold warns that too often these deals fall through. The bank may decline to provide funding, or the buyer doesn’t have enough to cover the difference and finds themselves suddenly in breach of contract. Sometimes they have buyer’s remorse in the hours after the heated bidding process has ended.
When a deal doesn’t close, both parties often feel entitled to the deposit, while only one will actually receive it. It could be held in trust until there is litigation and/or a release, before the seller is able to move on to another offer.
The aim, then, is a fair and realistic offer that can actually go through. We want to avoid promises of large sums that won’t pan out, which ties the seller’s hands and sometimes results in them having to settle for a lower offer later on.
Bully offers can force sellers into taking them, as they’re hard to say no to. The risk, though, is that you may be sacrificing the chance to receive better, cleaner offers because you’ve been blinded by the original dollar value offered. This is where you really have to trust your agent, and make sure you work with someone local who truly understands the ins and outs of the Guelph market. If the offer doesn’t go through, suddenly the agent has to try to recreate for the seller another offer—one that likely can’t compete with that first figure they were dazzled by.
Is the Guelph market healthy? Or is this collateral damage caused by uneducated clients and agents who think they have to win at all costs?
There are many reasons driving the astronomical pricing. To start, Guelph is in desperate need of inventory and is currently at an historic low. The pandemic may have played a role. The influx of people migrating from the GTA definitely plays a part.
There’s another important point that can’t be overlooked. People are afraid to put their home on the market because they worry about where they will go. It’s one thing to sell, but you also have to buy in this market.
Last, it could be due to a specific confluence of factors. With interest rates at an all-time low, it’s cheap to borrow money right now. Add to this how expensive and out of reach renting has become, and many renters might finally be pushed into purchasing a home. Because the inventory out there is so low, they may spend more than they can reasonably afford, but rationalize it by planning to rent out the basement, for example, to help them cover costs going forward.
Whatever the exact scenario, Arnold advises caution. “Do I want the highest dollar for my client? One hundred percent,” she says, “but I also want to be certain that on the day of completion we actually have a transaction occur. Where will the agents who are not educating their clients be when things need to be dealt with in the aftermath?”
If you’re considering selling, Arnold and her team would like the opportunity to talk with you about what it is you really need and want. Learn how the Here to Help team can protect you, how they can set you up for success and not failure.
“There are benefits, but also many risks, in this current seller’s market. It’s important to have an educated and experienced agent properly represent you. If you have any questions or want to chat, me and my team, the Here to Help Team, are here for you!”
Andra Arnold can be reached at 519-766-6041 or via email at [email protected].