It seems like everyone these days is at the limit of their frustration. Patience is thin, tempers are short – people everywhere are fed up with, well, almost everything.
In our day-to-day activities as Hamilton realtors, we make it our goal to minimize stress for our clients. When we miss the mark, we try our best to use feedback to refine and improve our methods of doing things.
Whether you are a buyer or a seller in Hamilton & the surrounding areas right now, chances are that you feel like you’re in a pressure cooker.
Buyers feel stripped of power. First-time buyers, especially, worry that they will never get an offer accepted. If they do, the stress of having to put in a firm offer, at the top of their budget, without so much as a home inspection makes them wonder if this is really the right thing to do.
Sellers are overwhelmed with the work they have to do to prepare their homes. They’re afraid of strangers going through their space during a pandemic. They wonder if they’re getting the best price and taking full advantage of their equity – especially if they also have to buy!
Adding to all of that, we know that some of our industry practices can seem confusing. So today, we want to peel back the curtain to explain some of the things we do.
We Have to Follow the Rules
It might surprise you to know that Realtors (and of course Hamilton Realtors) are tightly legislated. Everything from what we call ourselves (Realtor? Real Estate Agent? Salesperson? Broker?) to how we market properties is regulated by the Real Estate and Business Brokers Act, 2002.
Rules are good, for the most part. In fact, there are some things we would like to see regulated a little more! However, following the laws that apply to us can sometimes mean doing things that don’t seem to make a lot of sense to consumers.
Here are a few common things that people ask us about, and the misconceptions we would like to clear up:
Why the Exclusive Listings?
Once in a rare while, we create an exclusive listing contract to facilitate a deal between a buyer and seller who want to bypass the MLS experience for their own reasons. This doesn’t happen very much, though. It could be a seller who doesn’t want neighbours to know they’re selling, an older person who is nervous about strangers in their home, or even a victim of domestic violence who needs to keep things under the radar. [In some of these cases, there would not be a sign, of course, just a private contract to protect the client’s privacy.]
More than a few potential buyers wonder whether we list our properties as “Coming Soon” or “Exclusive” as a way to avoid sharing commission with other agents.
I will not presume to speak for all Hamilton realtors here, but I can tell you that our team does not usually use Exclusive contracts that way. In fact, a software system called Broker Bay alerts other realtors to our exclusives that might interest their buyers, and we welcome calls from them while our listings are under exclusive contracts.
Our fiduciary duty to clients – sellers, in this case – requires that we look out for their best interests. We like to express it this way:
When we represent a client, we market their home as we would our own.
First things first: We are not allowed to market homes that are not under contract. Can you imagine if there were no rules about this? Unscrupulous agents could take a picture of any house on any street and post it as being for sale just to get people calling them. We must have written permission from home owners to advertise their property. This leads to the next point:
We must consider factors that will affect a sale when creating a marketing strategy.
One of these is the speed of the market . Right now, that speed is lightning fast.
Hamilton Realtors have to coordinate a way to expose the listing to as many of the right potential buyers as we reasonably can in order to serve our clients well. This requires time on the market. The reality of the Hamilton/Burlington/Niagara markets is that a large number of our buyers come from Toronto. Since few of them can just drop everything and come to look at a brand new listing within an hour of its release, we work at letting them and their agents know what’s coming up at least a couple of days in advance. This is something we cannot do without a written agreement. An exclusive contract – aka Coming Soon.
It takes a little time to get a listing ready for MLS.
Even after the sellers complete their cleaning, decluttering, and staging, there are photographers and videographers to book. They require some time to edit their footage and photos. To get the best pictures, we schedule these immediately after a deep cleaning. We try to allow at least two days, if possible, to get all the media shot, edited, and formatted. (In case our photographers are reading this: We have to acknowledge that sometimes they burn the midnight oil for us! They turn things around much more quickly when we really need it done. We couldn’t do our jobs without them.)
Hamilton Realtors are not allowed to place a property for sale on MLS without images. (The local Board actually charges a fine for this infraction). This means we must wait until the pictures are ready before listing publicly. But, we have to pay for all those media services up front. Signing an exclusive contract for the preparation period- ideally one that is almost identical to the full MLS listing contract – ensures that both agent and seller are clear on the terms of their agreement, and that both are happy to work together to sell the property.
In short: An exclusive, or coming soon, listing may be available to view, whether you have your own agent or you call the listing agent directly. Or it may be that you can book an appointment, show your interest, and be kept up to date as offers are received so that you don’t miss out on a chance to compete if you’d like to. It is sometimes a necessary step on the road to getting a property listed publicly on the MLS.
Why Do They Hold Offers?
This may be one of the most frustrating things for buyers. It’s hard not to get exasperated when every house has an offer date, all but guaranteeing that there will be multiple offers. Our buyer clients often feel mounting frustration at the way they feel forced into submitting high, firm offers on imperfect properties.
Please believe us when we say that this frustrates us in your behalf. And it may not help, but the reason is, once again, that a listing agent must work in the best interest of their seller client.
Sellers want (and deserve) to get market value for their largest asset. It’s sometimes difficult to predict what the market will dictate, though. According to Inman, “Market value is an opinion of what a property would sell for in a competitive market.”
With demand at an all-time high, the only way to expose a property in many cases, is to hold off on considering offers.
We recently listed a starter home in Hamilton for a price that our sellers would have gladly accepted, only to be completely surprised when it sold for $98,000 over asking. In this case, an early offer came in at $45,000 over asking.
Our clients decided to wait out the week and let the market do its thing. In the end, that was the right decision for them. It certainly helped when they had to buy their next place and they were forced to pay well over asking for that property, too!
Why Do They List at a Price They Won’t Accept?
Full disclosure: Until recently, we have counselled our clients not to do this, as it felt unethical. It’s so hard for new buyers to understand that they can’t afford a house that is “in their budget.”
We have since adjusted our own approach to determining a list price, despite our own personal feelings.
Bidding wars have really grown legs and taken on a life of their own. What started as a surprise spike in demand, where sellers were thrilled to get a little over asking, has snowballed into an entrenched trend.
Nowadays, most desirable properties in Hamilton and area are getting multiple offers and are selling above their asking price. Buyers have come to terms with this reality, and have begun shopping below their budget to avoid disappointment. If they have $700 000 to spend, they are not looking at anything listed above $650 000, since they know they will be outbid.
A seller who wants to appeal to the buyers with the right budget must market in such a way that they will see the property. It’s bonkers. We know. And we hate it and hope it settles down soon.
If you are a potential buyer or seller in this market that’s moving at breakneck speed, and you would like to talk to expert Hamilton Realtors about your needs, fears, or frustrations – we are just a phone call away. We would be happy to try to work out a solution that helps ease some of the stress for you. Give us a call, or drop a line.
Looking for help to Buy or Sell in this crazy market?
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