Header Image
The Key to Selling Your Home!
Header Image

Temperatures Cool, but Not Ottawa’s Resale Market

 
 
 
Members of the Ottawa Real Estate Board sold 2,017 residential properties in August through the Board’s Multiple Listing Service® System, compared with 1,725 in August 2019, a year over year increase of 17 per cent. August’s sales included 1,576 in the residential-property class, up 22 per cent from a year ago, and 441 in the condominium-property category, an increase of 2 per cent from August 2019. The five-year average for August unit sales is 1,668.
“August’s resale numbers were undoubtedly driven by the considerable increase in new listings that came onto the market in both July and August,” states Ottawa Real Estate Board President Deb Burgoyne. “There were at least 300 more residential and 175 more condo listings added to inventory than we saw last year at this time. In fact, we have not seen new listing numbers like this since August 2015,” she adds.

“The question that comes to mind is: what is propelling these new listings? Well, there are several contributing factors; there are Sellers that are ready to capitalize on their investments, there are those who may be moving into new builds or further out of the city, and let’s not forget boomers who are downsizing or perhaps moving into rentals.”

“Whatever their motivations, if the rate at which properties are coming onto the market can be sustained, it will surely bring some much-needed balance. For some time, as inventory comes on the market, it is quickly being absorbed. If this increased listing trend continues, at some point, the housing stock may finally build to a point that demand is going to be somewhat satiated,” Burgoyne proposes.

August’s average sale price for a condominium-class property was $383,640, an increase of 24 per cent from this time last year, while the average sale price of a residential-class property was $592,548, an increase of 22 per cent from a year ago. With year to date average sale prices at $566,291 for residential and $357,779 for condominiums, these values represent a 17 per cent and 19 percent increase over 2019, respectively. *

“A culmination of factors has been playing into the price increases in Ottawa’s resale market. Certainly, multiple offers are a dominant element. The reason that we have so many offers highlights the number of active buyers in the market – due to a variety of dynamics, such as record low mortgage rates, recently announced decreased debt/equity thresholds, migrating buyers coming from larger markets who may have received high returns on their home sales, etc. When you add these to the already pent-up demand from our local residents, it has created a perfect storm, so to speak.”

“This is an extremely challenging market for many, especially those on the buying side. Many are experiencing what we call ‘buyer burnout’, having placed many offers without success. We perceive a change in buyers behaviour regarding expectations, that were perhaps, until recently ‘hyped’, or a product of watching a myriad of home improvement shows and/or visiting new builder model homes. Our current reality is perhaps making some buyers more pragmatic and compromising on what they accept, whether it’s a home’s condition, age, or location,” Burgoyne suggests.

“What we need to be cognizant of is that Ottawa is a capital city and a growing city, that until now has been well-insulated when it comes to resale prices. If you look at other larger cities, they have gone through this already. We are just in the early stages, with no end in sight at this point. I suspect that prices are not going to come down, nor is activity going to slow down in the near future. Whether you are on the buying or selling side of a transaction, this is not the kind of market to navigate without guidance. An experienced REALTOR® will ensure Buyers are making strategic offers, and Sellers are not leaving money on the table.”

In addition to residential and condominium sales, OREB Members assisted clients with renting 2,232 properties since the beginning of the year compared to 1,906 at this time last year.
 

Can a Real Estate Deal Fall Through Due to COVID-19?

 
 
 
5 Frequently Asked Questions About Real Estate Agreements During COVID-19*
*This article was written by Mark Weisleder of RealEstateLawyers.ca LLP

In the wake of COVID-19 there has been a lot of uncertainty—this fragility has extended to the housing market as many were either mid-deal, planning on buying or selling, or had a project underway. As real estate professionals, we have received a lot of questions regarding the pandemic and the housing market, frequently around real estate agreements and how COVID-19 has impacted such agreements. In this blog, we will answer our most frequently asked questions from both clients and Realtors, about how the pandemic has affected real estate agreements:

1. Can a buyer cancel an agreement due to COVID-19?
The simple answer is no. If a buyer cannot obtain a mortgage, goes into quarantine or the value of the property decreases, these are not acceptable excuses to cancel a real estate agreement. Either terms of an extension are agreed to, or the buyer can be sued for any deficiency the seller suffers on a resale.

2. Can a seller refuse a pre-closing visit due to being afraid of COVID-19?
If the visit is provided for in the agreement, a safe compromise should be worked out, with perhaps only one buyer visiting the home. Such buyer would be expected to wear a mask and gloves, and only enter the home for a short time (maximum 20 minutes). During such a visit, a buyer should also be required not to touch anything in the home to ensure maximum safety. Another option is for the buyer and seller to agree to a Zoom meeting where the seller goes around the entire house showing the buyer all areas of concern. A final option we have seen is when the seller arranges to vacate the property early on the closing date and have the buyer enter the property for a final inspection. This option provides both parties with a fair final inspection of the home while also leaving enough time to close.

3. Can the Government Land Registry System close down?
While this is theoretically possible, we have been assured by the Director of Titles that this will not occur since the system is being operated by staff who are working remotely. In the unlikely event that this did occur, most real estate closings could still proceed as long as the buyer had title insurance which provides gap coverage, meaning that the agreements can close as scheduled, money can be paid to sellers, keys released to buyer and registrations occurring once the system is up and running again. Gap coverage means that in the unlikely event, a lien or judgment arises in the intervening period, which could affect the title. The buyer’s title insurance policy will remove it.

4. Can a buyer or seller complete a real estate closing without visiting a lawyer in person?
The answer is yes, but not all law firms offer this service. Technically speaking there is no requirement to meet any buyer or seller in person. All document signings can be done by video conference. If a law firm is registered as a bill payee at major banks, buyers can transfer the closing down payment directly to its trust account online, so that they do not have to line up at a bank branch with a mask for an extended period of time to obtain a bank draft. For sellers, this would mean signing all documents by video conference and automatically transferring closing funds by Electronic Funds Transfer directly to the seller’s bank account after closing, the same way real estate commissions are paid after closing.

5. Do you need special clauses to protect buyers and sellers during the pandemic?
Here are three practical clauses to include in any agreement during the pandemic:

The Buyer shall pay the balance of the purchase price, subject to the usual adjustments by wire transfer.
The parties acknowledge and agree that all closing documentation can be signed electronically and forwarded by email or fax in accordance with the Electronic Commerce Act, 2000, S.O.2000,c.17
The parties agree that the keys to the property shall be left in a lock box at the property and the code to the same is to be provided to the Buyer’s lawyer in escrow pending closing of this transaction.
Otherwise, no further clauses should be added, as they do more harm than good, especially when they give buyers or sellers the right to terminate an agreement. As stated earlier, even in the remote situation that the government registration system goes down, real estate agreements can still close if there is gap coverage in place through the title insurance. Legal advice should always be obtained before any additional clauses are introduced into any real estate agreement of purchase and sale.

This article was supplied by RealEstateLaywers.ca LLP. It is being posted on the blog for information purposes only and does not constitute legal advice nor an endorsement of the author or his firm. Consumers are advised to reach out to and engage their own legal counsel regarding their specific situation. In Ontario you can find a lawyer by accessing the Law Society of Ontario’s Lawyer Referral Service.
 

Want to Sell Your House Faster? Make it Anonymous

 
 
 
What do you notice when you visit a model home in a new development? Often, you will find wonderfully furnished and decorated rooms that anyone could live in.

The operative word here is “anyone”.

Sure, there might be a computer screen on a desk in the den, or a child’s doll sitting in a corner, but for the most part, all the rooms are anonymous. There is a sense of family, but no specific family… the feeling of personality, but no specific person.

The professionals who set up a model home make it anonymous for a reason. They want buyers to view it as their potential home, not someone else’s. These professionals know - based on decades of experience - that this strategy helps sell houses faster and for a better price.

Why not use this same strategy when showing your home?

It’s easy. Just put away that soccer trophy, take down the wedding photo, and box those souvenirs from the family vacation at Disneyland. No, you don’t have to completely empty your closets and drawers. Just pack those personal items that can be seen when a potential buyer views a room. Put away toothbrushes, collectibles, even unopened mail. Don’t forget to clear the fridge door, which is often a mosaic of personal items in family homes.

If you have lots of personal items, consider renting a storage unit for the few weeks that your house will be on the market. It’s worth the investment.

You wouldn’t think of buying a birthday cake with a stranger’s name on it. Keep that in mind when you show your home. Make it anonymous!

Need more ideas for selling your house faster and for the best price possible? Call today.

 

Clean or Replace Air Filters and Fan Screens

 
 
 
It’s a good idea to clean or replace your home’s air filters and screens at least once a year to help keep your indoor environment safe from mould, dust mites and other allergens.

But don’t stop at your heating, ventilation and cooling/air-conditioning systems. Think of all the other filters and screens that need cleaning, such as those in humidifiers, range hoods, bathroom fans, and windows. Unfortunately, homeowners often neglect to clean or replace their range hood filters. This can lead to a thick buildup of greasy residue that could easily compromise the important function of removing cooking gases, odours and humidity from the stovetop area. The result can be unhealthy air trapped in your kitchen, not to mention an accumulation of a thin film on your walls, ceilings and countertops.

Likewise, bathroom fans and window screens can trap layers of dust over time that will hinder the free flow of air to and from the rooms you want to be well ventilated.

 

When it Comes to Offers, it’s Not Always about Price

 
 
 
When considering which of two or more competing offers to accept for your home, there is no doubt price will play a huge role. After all, if Offer #1 is $10,000 higher than Offer #2, that’s an enticing difference that puts thousands of extra dollars in your pocket.

However, price isn’t the only thing you should think about when comparing multiple offers. There are other factors you need to consider too.

For example, you’ll need to think about the impact of any conditions that are in the offer. If Offer #1 is conditional on the buyer selling their current property, then what happens if they don’t? You could end up with an offer that dies and be forced to list your home all over again.

In that circumstance, accepting the lower offer may be your best move.

There’s also financing to consider. Most sellers will attach a certificate from their mortgage lender to show that they can afford the home and will likely secure financing with little difficulty. If you get an offer where the ability of the seller to get financing is in doubt, that’s a red flag.

The closing date is another important factor. Offer #2 might propose a closing date that’s perfect for you, while Offer #1 is four weeks later. If you’ve already purchased another home, you might require a month of bridge financing if you accept Offer #1. There’s nothing wrong with that per se, but the costs and additional hassle are factors you should consider.

As you can see, assessing competing offers isn’t as easy as it looks.