Top 5 questions from home buyers and sellers
Ontario homebuyers faced a two-pronged challenge in 2021: the ongoing impacts of COVID-19 and a housing market that remained red hot across the province.
I received a lot of questions from consumers last year about the real estate market. Here are 2021’s top five questions and a quick recap of the answers.
1. As a homebuyer, what can I expect when there are competing offers on a home?
During a bidding war, the listing brokerage must disclose the number of active offers on a property, whether any of the buyers are represented by the listing brokerage, and whether any offers include an adjustment to the commission the seller would pay the buyer’s brokerage. These disclosures help ensure a level playing field for all buyers.
The seller can accept or reject your offer, make a counter-offer, or even give one or more buyers an opportunity to “improve” their offers.
2. We were involved in competing bids on a home and the seller accepted an offer that was lower than ours. Doesn’t the seller have to accept the highest offer?
Sellers are not required to choose the highest-priced offer. Other factors can influence their decision, such as the size of the deposit, the closing date and other terms and conditions they prefer.
3. What’s the difference between listing price and sale price, and why are they often so different?
In years past, the asking or listing price was generally a close estimate of what the home was worth, and the selling price would end up being very close to the asking price.
However, in today’s hot housing market, the list price is more often being used as a marketing tool to generate interest in a property. A seller has the legal right to set the asking price at whatever amount they believe is best for selling their home. RECO does not regulate the decisions of sellers or buyers.
4. We are first-time buyers frustrated by the current real estate market. What advice or tips do you have for us?
First, interview a few real estate agents and choose the one who best understands your needs.
Second, manage your emotions: make sure you know what you want or need in a property and stick to what you are prepared to pay.
Third, if you want to submit an offer without any conditions, be sure you’re comfortable with taking that risk as it can have significant repercussions.
And fourth, real estate contracts are legal documents, so you read and understand everything before you sign, and get legal advice.
5. In this pandemic, how can I protect myself while viewing homes?
Brokerages and salespeople must follow public health guidelines and safety protocols when showing a home. Many brokerages offer virtual showings to maximize the number of buyers seeing a property, while limiting in-person visits to those who are particularly interested.
As a seller, you can request a limit to the number of visitors during all viewings, insist that no one displaying symptoms is allowed inside, and also provide specific instructions to reduce the touching of surfaces, among other protocols.
As a prospective buyer, you should make sure to wear a mask and use hand sanitizer as you enter the home.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.