Do homebuyers and sellers in the Toronto real estate market believe that real estate negotiations are all about multiple offers? It appears that way when I talk to clients. This, however, is not the real world of real estate negotiating. The historical way of trying to make a purchase or sale is by calm discussion between both parties to agree upon a price that is satisfactory to both.
The Toronto market, since the middle of the late 90's took a great upward turn, gathering momentum yearly and almost every home in the central core had a delayed offer date, creating a frenetic market for the sellers and buyers. Few homes had a transaction with only one offer.
When I speak with buyers now, they want to wait to make a purchase because they feel that prices are going down. They do not feel this pent up anxiety to have to make a purchase immediately because the market is too calm for them, something they are not used to. Many buyers today have had only one experience in making an offer, that of bidding on a home that has tough competition, boosting the price way over asking. This left one extremely happy seller, only one happy buyer and many who were disappointed.
This is a great time to make a purchase. Interest rates remain low and stable. You can get a home inspection in a timely manner and make a knowledgeable decision based on excellent information. Negotiations between the seller and buyer are more in tune with a conventional market and purchasing a home now is usually at or below the asking price.
Last year properties were under priced to attract enormous competition. The right asking price for a property is critical this year because most houses are no longer attracting multiple offers. Sellers are advised to list at a price they would be willing to accept or use a realistic starting point for negotiations with a prospective buyer.
The Toronto real estate market is still healthy. Buyers and sellers must not get the impression that we are suffering the same market conditions as our neighbours south of the border. One thing we can say for our Government - we don't allow a zero percent down payment. The federal government has announced reforms aimed at avoiding a U. S. style housing price bubble. Starting Oct. 15, the Finance Department will stop guaranteeing 40-year mortgages and mortgage loans with no down payment. Unconventional mortgages under 20% down are insured through CMHC (Central Mortgage and Housing) and all buyers must qualify for a mortgage based on their income and debt ratio (unless using private financing).
Maureen O'Neill of the Toronto Real Estate Board says “The Toronto Real estate market has experienced a slow down in actual numbers of 7,806 sales of single-family dwellings sold from that of July 2007 figure of 8,912 but the sales were up 10 per cent from July 2006 (7,082).
Furthermore, the sales decrease in July 2008 from July of 2007 was distributed unevenly across the GTA. Within the City of Toronto, the 3,132 sales recorded in July 2008 is down 14 per cent from last July's 3,640 figure but up 10 per cent from the 2,852 sales recorded in July 2006. Comparing July 2007 with July 2006, a period before the Land Transfer tax went into effect in Toronto, sales increased 28 per cent.
Overall, the GTA average price rose just over one per cent in July 2008 over July 2007 to $371,427 from $366,012, and a nine per cent increase from $342,034 recorded during July 2006.
Once again, price movements differed depending on the part of the GTA involved.
Within City of Toronto boundaries, the increase was marginal (under one per cent) to $395,342 in July 2008 from $395,044 in July 2007 and up 10 per cent from the $360,409 recorded during July 2006".
The Toronto real estate market is strong and now is a great time to buy.
Diane Plant is a Broker with Forest Hill Real Estate, serving the Greater Toronto Area since 1988. She is in partnership with her son, Jeremy Plant, forming Team Plant. Get FREE membership to Team Plant's Preferred Buyer's Club by visiting our website http://www.team-plant.com and click on Buyers.
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